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

Author

Listed:
  • Laetitia Lepetit

    (LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges)

  • Clovis Rugemintwari

    (LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges)

  • Frank Strobel

    (University of Birmingham [Birmingham])

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.

Suggested Citation

  • Laetitia Lepetit & Clovis Rugemintwari & Frank Strobel, 2015. "Monetary, Financial and Fiscal Stability in the East African Community: Ready for a Monetary Union?," Post-Print hal-01134835, HAL.
    • Handle: RePEc:hal:journl:hal-01134835
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    Cited by:

    1. Simplice A. Asongu, 2015. "Growth and Institutions in African Development by Augustin K. Fosu," Research Africa Network Working Papers 15/033, Research Africa Network (RAN).
    2. Simplice A. Asongu & Oludele E. Folarin & Nicholas Biekpe, 2020. "The Long-Run Stability of Money in the ProposedE ast AfricanMonetary Union," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 35(3), pages 457-478.
    3. Simplice A. Asongu & Samba Diop, 2025. "An Index of African Monetary Integration (IAMI)," The International Trade Journal, Taylor & Francis Journals, vol. 39(1), pages 3-29, January.
    4. Simplice Asongu & Jacinta Nwachukwu & Vanessa Tchamyou, 2017. "A Literature Survey On Proposed African Monetary Unions," Journal of Economic Surveys, Wiley Blackwell, vol. 31(3), pages 878-902, July.
    5. Serge Ky & Clovis Rugemintwari & Alain Sauviat, 2019. "Is fintech good for bank performance? The case of mobile money in the East African Community," Working Papers hal-02155077, HAL.
    6. Asongu, Simplice & Nwachukwu, Jacinta & Tchamyou, Vanessa, 2017. "A summary of a survey on proposed African monetary unions," MPRA Paper 79637, University Library of Munich, Germany.

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