Bulletin n. 2/2008
September 2008
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Katsimi Margarita
    Exchange rate strategies towards the euro-zone for new EU member states with currency boards
    in Journal of Macroeconomics , Volume 30, Issue 3 ,  2008 ,  1043-1063
    The paper investigates the transition of the new EU countries with a currency board arrangement (CBA) to the euro-zone. The arguments for and against retaining a CBA while participating in the exchange rate mechanism of the EU (ERMII) are discussed. Then, we show in the framework of a signalling model that abandoning a CBA and allowing the exchange rate to fluctuate within the bands of ERMII can signal to markets the sustainability of nominal convergence and, hence, diminish uncertainty in the pre-accession period and increase the probability of being accepted into the euro-zone.
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