عنوان

Currency substitution and its implications for macroeconomic policy:

Number

TLpq304371423

.Language of Text, Soundtrack etc

انگلیسی

Title Proper

Currency substitution and its implications for macroeconomic policy:

General Material Designation

[Thesis]

First Statement of Responsibility

M. F. Issa

Title Proper by Another Author

A case study of Egypt

Name of Publisher, Distributor, etc.

The University of New Mexico

Date of Publication, Distribution, etc.

1997

Specific Material Designation and Extent of Item

185

Dissertation or thesis details and type of degree

Ph.D.

Body granting the degree

The University of New Mexico

Text preceding or following the note

1997

Text of Note

Since the early 1970s, many developing countries, including Egypt, have experienced periods of significant growth in foreign currency deposits relative to their national currencies. This is because of a high degree of uncertainty in the political system and rising inflation rates. This research deals with currency substitution in Egypt from both the theoretical and empirical standpoints. It examines the phenomenon of currency substitution by using a growth model, because the stationarity and other tests of the variables in the model indicate that running a growth model is more suited for the Egyptian data. The empirical analysis of the determinants of currency substitution showed the importance of the expected rate of depreciation in explaining the holdings of foreign currency deposit for the period 1980-1992. The proxy for the expected rate of depreciation in this research was the inflation rate differential between Egypt and its major trading partners. Throughout most of this period, there was an upward trend in the holdings of foreign currency deposits relative to domestic currency deposits as evidenced by data on the holdings of foreign currency. The research also investigated the effects that the presence of currency substitution had on the stability of the demand functions for money (defined both narrowly and broadly). Based upon the Chow test for stability, the broadly defined money demand function (M2) is stable, while the narrowly defined money demand function is not. These stability results seem to verify the targeting procedure of the Central Bank of Egypt (CBE). The research also presents data which shows that the decision to allow residents to hold foreign currencies tend to complicate the government's efforts to collect more revenues from inflation tax. Through an inflationary finance model, the research shows that once currency substitution is taken into consideration, the inflation rate that maximizes the inflation tax can be lower than when currency substitution is absent. Finally, this research investigates the tax system in Egypt to see if there is a possibility of reforming it, for the purpose of gaining additional revenues to compensate the reduction in revenue from inflation tax.

Economics

Economics

Finance

Social sciences

M. F. Issa

Electronic name

p

[Thesis]

276903

a

Y