Kurt Schuler - Böcker

The IEA's publications have a reputation for challenging established ideas and Dr Kurt Schuler's research in central banking is in that tradition. In this field the conventional view is that every independent country should have its own central bank so that it can conduct an independent monetary policy. And on this basis many developing countries have established central banks. In this publication Schuler gathers evidence to determine whether or not countries with central banks can claim superior economic performance to those with other monetary systems. Schuler's evidence is unusual in that it relates to virtually the whole population of countries, rather than a statistical sample: 155 countries included in his study have over 99 per cent of the world's population and produce over 99 per cent of its output. By using only the most straightforward statistical techniques he produces results which will surprise many policy-makers: Almost all the currency quality measures indicate that central banking in developing countries has performed worse than other monetary systems and worse than central banking in developed countries.Monetary policy in most developed countries yields a low-quality product at unnecessarily high cost to consumers. Poor monetary performance has cost many developing countries much-needed growth.

As the new Russian state struggles with the transition to a market economy, the need for radical monetary reform becomes increasingly urgent. The choice of reform is crucial, for it will largely determine Russia's future economic performance. In order to break free of the lingering effects of Soviet central planning, the new Russian state needs a stable, convertible currency.Steve H. Hanke, Lars Jonung and Kurt Schuler propose that Russia establishes a currency board which would issue a Russian currency fully convertible with international currency, backed 100 per cent by international bonds. The international community would aid in establishing the currency board by providing the initial reserves. Early supplies of this new Russian currency would be distributed free to Russian citizens. The authors give detailed explanations of how the currency board could be established and how it would work.