Lithuania: History and Future of the Currency Board Arrangement

International Monetary Fund

No 2002/127, IMF Working Papers from International Monetary Fund

Abstract: 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. First, several indicators of competitiveness are analyzed in the context of productivity gains and flexibility of the labor market and prices are considered. Then, the equilibrium exchange rate and misalignments of the actual rate from it are estimated in a cointegration framework. 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.

Keywords: WP; U.S. dollar; dollar rate; Euro appreciation; export price; financial system; Real effective exchange rate; competitiveness; currency board arrangement; appreciation vis-à-vis; reference rate; investment portfolio; cash euro; CBA suits Lithuania; euro peg; Real effective exchange rates; Exchange rates; Productivity; Nominal effective exchange rate; Competition (search for similar items in EconPapers)
Pages: 35
Date: 2002-08-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=15929 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2002/127

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().