A Comparative Study of Seigniorage: Egypt and Qatar

Ibrahim L. Awad

Economic Studies journal, 2023, issue 4, 172-190

Abstract: This study adopts the model of CB’s balance sheet and government budget identity developed by Klein & Neumann (1990) to investigate the question of “Will the effect of monetary seigniorage on CPI inflation and real GDP growth be differentiated based upon the adopted monetary policy regime and the initial source of seigniorage?” The study compares Egypt and Qatar, as both countries apply asymmetric monetary policy regimes. Conclusions by structural VAR model are: (i) monetary seigniorage does not affect either CPI inflation or GDP growth in Egypt. The opposite is true in the case of Qatar. (ii) in contrast to the case of Qatar, the mechanism of the money supply channel is broken in Egypt because the central bank of Egypt applies a sterilization policy to maintain dual objectives for monetary policy, namely foreign exchange rate and inflation rate.

JEL-codes: C32 E31 E42 E51 H68 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:bas:econst:y:2023:i:4:p:172-190

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