Monetary, Financial and Fiscal Stability in the East African Community: Ready for a Monetary Union?

Laetitia Lepetit, Clovis Rugemintwari and Frank Strobel

Working Papers from HAL

Abstract: We examine prospects for a monetary union in the East African Community (EAC) by developing a stylized model of policymakers' decision problem that allows for uncertain benefits derived from monetary,financial and fiscal stability, and then calibrating the model for the EAC for the period 2003-2010. When policymakers properly allow for uncertainty, none of the countries wants to pursue a monetary union based on either monetary or financial stability grounds, and only Rwanda might favor it on fiscal stability grounds; we argue that robust institutional arrangements assuring substantial improvements in monetary, financial and fiscal stability are needed to compensate.

Date: 2012
Note: View the original document on HAL open archive server: https://unilim.hal.science/hal-00916699v1
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Related works:
Journal Article: Monetary, Financial and Fiscal Stability in the East African Community: Ready for a Monetary Union? (2015)
Working Paper: Monetary, Financial and Fiscal Stability in the East African Community: Ready for a Monetary Union? (2015)
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