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A Comparative Study of Seigniorage: Egypt and Qatar

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  • Ibrahim L. Awad

Abstract

This study adopts the model of CB’s balance sheet and government budget identity developed by Klein & Neumann (1990) to investigate the question of “Will the effect of monetary seigniorage on CPI inflation and real GDP growth be differentiated based upon the adopted monetary policy regime and the initial source of seigniorage?” The study compares Egypt and Qatar, as both countries apply asymmetric monetary policy regimes. Conclusions by structural VAR model are: (i) monetary seigniorage does not affect either CPI inflation or GDP growth in Egypt. The opposite is true in the case of Qatar. (ii) in contrast to the case of Qatar, the mechanism of the money supply channel is broken in Egypt because the central bank of Egypt applies a sterilization policy to maintain dual objectives for monetary policy, namely foreign exchange rate and inflation rate.

Suggested Citation

  • Ibrahim L. Awad, 2023. "A Comparative Study of Seigniorage: Egypt and Qatar," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 172-190.
    • Handle: RePEc:bas:econst:y:2023:i:4:p:172-190
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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