Stabilité du Currency Board et fuite des capitaux. Modèle théorique et application empirique au cas de Djibouti

Currency Board stability and capital flight. Theoretical model and empirical application to the case of Djibouti

Moustapha Aman and Nikolay Nenovsky ()

MPRA Paper from University Library of Munich, Germany

Abstract: The article explores the relationships between capital flight, the monetary regime instability and the general institutional stability of a country, with an empirical application to Djibouti. Are constructed variables for the capital flight, indicator for the instability of Currency Board and for the stability of institutional settings. This allows in a second time to test statistically and econometrically the impact of capital flight on Currency Board stability. The results show that the Currency Board in the case of Djibouti is entirely determined by capital movements (legal and illegal), unlike other Currency Boards where trade flows play a substantial role. The institutional framework and corrupt practices are also critical to understand the Djibouti monetary equilibrium and the perpetuation of the Currency Board in the presence of unofficial practices.

Keywords: capital flight; Currency Board; monetary regime instability; Djibouti (search for similar items in EconPapers)
JEL-codes: E5 F2 (search for similar items in EconPapers)
Date: 2015, Revised 2018
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https://mpra.ub.uni-muenchen.de/93541/1/MPRA_paper_93540.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:93540

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