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Periodical article | Leiden University catalogue | WorldCat |
Title: | De-Monetisation, Inflation and Coffee: The Demand for Money in Uganda |
Author: | Henstridge, N. Mark |
Year: | 1999 |
Periodical: | Journal of African Economies |
Volume: | 8 |
Issue: | 3 |
Period: | October |
Pages: | 345-385 |
Language: | English |
Geographic term: | Uganda |
Subjects: | currencies money demand Economics and Trade |
External link: | https://jae.oxfordjournals.org/content/8/3/345.full.pdf |
Abstract: | Uganda's last 30 years of economic history have seen demonetization and some monetization. This paper provides an insight into the monetary consequences of the transition from war to peace in Uganda, and how, in the presence of distorted goods markets and repressed financial assets, private sector agents switched from money to coffee. The flight from currency was stemmed by it being an essential medium of transactions. The flight from time and savings deposits was more dramatic. Alternatives to money as a store of value were foreign currency and coffee. Reform and liberalization have supported a slow re-monetization of the economy. The paper investigates the recent monetary history of Uganda by estimating coherent money demand functions for currency, demand deposits and time and savings deposits. It reviews the changing structure of the economy, shocks and coffee booms, and the stabilization in 1992. The rate of re-monetization has been slower than de-monetization, despite strong growth during the 1990s, low inflation since 1992, and a coffee boom in 1994 and 1995. The econometric results of the study imply that alternatives to money have had a mixed role: in the short run, an increase in their price leads to an increase in the demand for money, especially currency. App., bibliogr., notes, ref., sum. |