Monetary, financial and fiscal stability in the East African community: ready for a monetary union?

Frank Strobel; L Lepetit; C Rugemintwari

doi:10.1111/twec.12243

Monetary, financial and fiscal stability in the East African community: ready for a monetary union?

Frank Strobel, L Lepetit, C Rugemintwari

Economics

Research output: Contribution to journal › Article › peer-review

5 Citations (Scopus)

317 Downloads (Pure)

Abstract

We examine prospects for a monetary union in the East African Community (EAC) by developing a stylised 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 2003–10. 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 favour it on fiscal stability grounds; we argue that robust institutional arrangements assuring substantial improvements in monetary, financial and fiscal stability are needed to compensate.

Original language	English
Pages (from-to)	1179-1204
Journal	World Economy
Volume	38
Issue number	8
Early online date	6 Dec 2014
DOIs	https://doi.org/10.1111/twec.12243
Publication status	Published - Aug 2015

Keywords

monetary union
real option
financial stability
East African Community

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10.1111/twec.12243Licence: None: All rights reserved

MonFinStabEAC_WorldEc_postprint
This is the peer reviewed version of the following article: Lepetit, L., Rugemintwari, C. and Strobel, F. (2015), Monetary, Financial and Fiscal Stability in the East African Community: Ready for a Monetary Union?. World Economy, 38: 1179–1204, which has been published in final form at http://dx.doi.org/10.1111/twec.12243. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving. Checked Feb 2016
Accepted author manuscript, 570 KBLicence: None: All rights reserved
MonFinStabEAC_WorldEc_preprint
This is the pre-peer reviewed version of the following article: Lepetit, L., Rugemintwari, C. and Strobel, F. (2015), Monetary, Financial and Fiscal Stability in the East African Community: Ready for a Monetary Union?, World Economy, 38: 1179–1204., which has been published in final form at http://dx.doi.org/10.1111/twec.12243. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
Submitted manuscript, 580 KBLicence: None: All rights reserved

Cite this

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Monetary, financial and fiscal stability in the East African community: ready for a monetary union?

Abstract

Keywords

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