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Economic Paper of the Day: Buiter on the Baltics
by Felix Salmon
and Yves Smith
Oct 03, 2007
Oct 03, 2007
Academics love to niggle over small differences. Willem Buiter is an academic, and today's he's writing on the difference between three very similar things, with respect to the currencies in the Baltic states and other small European countries:
- A currency board, where the local currency has a fixed exchange rate with the euro;
- Outright euroisation; and
- A weird kind of halfway-house, whereby the euro becomes joint legal tender with the existing currency, and eventually becomes the de facto (but, crucially, not de jure) currency of the country in question.
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