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Optimal Seigniorage and Tax-Smoothing in West African Monetary Zone (WAMZ): An Econometric Assessment

Author

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  • Elijah Udoh

    (University of Calabar, Nigeria)

Abstract

The fiscal performance of many sub-Saharan African countries has been quite dismal over the past, with a number of them accumulating huge deficits. This paper examines fiscal sustainability in the West African Monetary Zone (WAMZ). It departs from the standard model of fiscal sustainability and adopts the optimal seigniorage and tax smoothing model. Using vector autoregressive model and data from two selected countries, Ghana and Nigeria, the study finds no concrete evidence in support of the optimal seigniorage and tax smoothing in WAMZ. The findings call for important fiscal reforms to reverse the persistent fiscal deficits. Such reforms should include measures to ensure compliance and eliminate fiscal corruptions

Suggested Citation

  • Elijah Udoh, 2011. "Optimal Seigniorage and Tax-Smoothing in West African Monetary Zone (WAMZ): An Econometric Assessment," Journal of Developing Areas, Tennessee State University, College of Business, vol. 45(1), pages 251-277, July-Dece.
    • Handle: RePEc:jda:journl:vol.45:year:2011:issue1:pp:251-277
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    Cited by:

    1. Hearn, Bruce, 2013. "Size and liquidity effects in Nigeria: an industrial sector study," MPRA Paper 47975, University Library of Munich, Germany.

    More about this item

    Keywords

    West Africa Monetary Zone (WAMZ); Tax Smoothing; Seigniorage; Optimal Monetary and Fiscal Policy; VAR;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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