Currency Boards: A Bad Idea That Just Won't Go Away

One curiosity of the Asian financial crisis is the vogue for a quirky idea--the currency board. In Indonesia, President Suharto is proposing that the rupiah be pegged to the U.S. dollar, with a politically insulated currency board empowered to set and defend its fixed exchange rate. He is abetted by a U.S. economist, Steven Hanke at Johns Hopkins University, who promotes currency boards as a monetary panacea.

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