Extreme inflation has led to economic collapse and political chaos in contemporary Russia. This book presents a radical solution to this problem - a currency board system - with details of how to establish and operate such a system

We develop a model in which financial intermediaries hold liquidity to protect themselves from shocks. Depending on parameter values, banks may choose to hold too much or too little liquidity on aggregate compared with the socially optimal amount. The model endogenously generates a situation of...