More than 30 years after playing a key role in the creation of Hong Kong's dollar peg, John Greenwood reckons a currency board is still a good option for small, open economies.
Greenwood, who is Invesco's chief economist, told CNBC that Hong Kong's peg was at the head of a currency board revival over the past 20 to 30 years, most of which served the adopting countries well. Baltic and Balkan states were particularly effective in using currency begs, he said.
The London-based Greenwood is credited as the architect of the Hong Kong dollar peg after a 1983 article he wrote for the Asian Monetary Monitor provided the basis for the government's policy to link the local currency to the greenback. The peg was established in the same year.
"A currency board mechanism is now ideal for a small economy, which has very large volume of trade or capital movements, relative to the size of its GDP," Greenwood told CNBC on Tuesday, noting Estonia was known as the "Hong Kong of the Baltic" region because of its similarity to the Asian trading hub. Estonia was pegged to the Deutsche mark and later the euro until it joined the single currency zone in 2011 , and is regarded as one of the region's economic success stories.