Seigniorage and the Proposed East Africa Community (EAC) Monetary Union

Steven Buigut ()
Additional contact information
Steven Buigut: Andrew Young School of Policy Studies

The African Finance Journal, 2004, vol. 6, issue 2, 36-46

Abstract: A long-term objective of the East Africa Community treaty is to form a monetary union. This paper tests the viability of this proposal using a model of government finance that minimizes the social cost of financing government expenditure. The results indicate that the policies of these countries are consistent with inter-temporal tax smoothing, but the marginal social cost equalization hypothesis is rejected. Thus inflation tax does not have to differ across the countries for government financing reasons. This is therefore one less obstacle to monetary union.

Keywords: Social Cost Equalization; Seigniorage; Monetary Union; East Africa (search for similar items in EconPapers)
JEL-codes: E42 E5 F36 (search for similar items in EconPapers)
Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.journals.co.za/ej/ejour_finj.html (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:afj:journl:v:6:y:2004:i:2:p:36-46

Access Statistics for this article

More articles in The African Finance Journal from Africagrowth Institute Contact information at EDIRC.
Bibliographic data for series maintained by Kirk De Doncker ().