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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]

Author

Listed:
  • Aman, Moustapha
  • Nenovsky, Nikolay

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.

Suggested Citation

  • Aman, Moustapha & Nenovsky, Nikolay, 2015. "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 applica," MPRA Paper 93540, University Library of Munich, Germany, revised 2018.
    • Handle: RePEc:pra:mprapa:93540
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    capital flight; Currency Board; monetary regime instability; Djibouti;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • F2 - International Economics - - International Factor Movements and International Business

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