The Meaning of Currency Board for Fiscal Discipline and Economic Growth: The Case of Selected Post-transitional Countries

Mario Pečarić (), Tea Poklepović () and Dario Čobanov ()
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Mario Pečarić: University of Split, Faculty of Economics
Tea Poklepović: University of Split, Faculty of Economics

Chapter 11 in Financije teorija i suvremena pitanja = Finance - theory and contemporary issues, 2018, vol. 1, pp 253-276 from Josip Juraj Strossmayer University of Osijek, Faculty of Economics

Abstract: The topic of this work is the importance of exchange rate regime choice for economic growth and public debt in post-transition countries with a special emphasis on currency board. In the theoretical part of the work, brief review of exchange rate regimes is presented and a special emphasis is made on currency board systems, including its characteristics, models, advantages and disadvantages. For the purpose of this research, a hypothesis that currency board has been exhibited better performances taking into account growth rate and fiscal discipline has been empirically tested using t-test. The sample covered eight CEE countries from 2000 to 2014. Results obtained by this analysis confirmed the default hypothesis. The argument that the currency board system has a better impact on economic growth and public debt due to the fiscal discipline it brings, has proved to be correct.

Keywords: exchange rate regimes; currency board; public debt; fiscal discipline (search for similar items in EconPapers)
JEL-codes: E52 F31 H63 (search for similar items in EconPapers)
Date: 2018
ISBN: 978-953-253-150-3
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