Lithuania: History and Future of the Currency Board Arrangement
IMF Working Papers, August 1, 2002
Source details
- Canonical URL
- Lithuania: History and Future of the Currency Board Arrangement
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Bibliographic details
- Published: August 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451854992.001
Summary
- The paper examines the evolution of the institutional setup of Lithuania's Currency Board Arrangement (CBA) and competitiveness from 1994 through 2001, with a view to determining the resilience of the Lithuanian CBA to external shocks in 2002-03.
- The paper concludes that, under current policies, the CBA would be able to cope with sizable external shocks during 2002-03 provided supporting policies remain in place.
Analytical approach
- Competitiveness indicators are analyzed in the context of productivity gains and flexibility of the labor market and prices.
- The equilibrium exchange rate and misalignments of the actual rate from it are estimated in a cointegration framework.
Key findings and projections
- Time horizon of analysis: 1994 through 2001, with resilience assessment for 2002-03.
- Main conclusion: under current policies, the CBA would be able to cope with sizable external shocks during 2002-03 provided supporting policies remain in place.
Subjects and keywords
- Subject: Competition, Exchange rates, Financial markets, Foreign exchange, Nominal effective exchange rate, Production, Productivity, Real effective exchange rates
- Keywords: appreciation vis-à-vis, cash euro, CBA suits Lithuania, Competition, competitiveness, currency board arrangement, dollar rate, Euro appreciation, euro peg, Exchange rates, export price, financial system, investment portfolio, Nominal effective exchange rate, Productivity, Real effective exchange rate, Real effective exchange rates, reference rate, U.S. dollar, WP
Content in this bundle
- Lithuania: History and Future of the Currency Board Arrangement - WP/02/127