Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

A Case of Private Supply of Money in Stateless Somalia

A Case of Private Supply of Money in Stateless Somalia Since the collapse of the state in 1991 and the subsequent crash of the domestic currency, the Somali economy starved for liquidity to facilitate economic recovery and means to replace ageing banknotes. In the long absence of effective state authority, forged banknotes from factions competed to fill the void and became accepted. In much the way that Milton Friedman predicted, the consequent unregulated private supply of money seeking to capture seignoirage income soon raised prices, destabilised domestic markets, eroded the market value of Somali shilling banknotes and reduced it to pure commodity money. However, the experience did not lead to an infinite price level simply because the money issuers were unwilling to add zeros to denominations in fear that the public will not accept them. Rather, as the marginal cost of importing and injecting new reprints on existing highest denomination neared its exchange value, the incentive to import more banknotes subsided, and domestic prices started to stabilise. Incredibly, at this very low exchange value, the Somali currency survives and retains its service value, and real cash balances have actually increased. Copyright Oxford University Press 2002 « Previous | Next Article » Table of Contents This Article J Afr Econ (2002) 11 (3): 309-325. doi: 10.1093/jae/11.3.309 » Abstract Free Full Text (PDF) Free Classifications Article Services Article metrics Alert me when cited Alert me if corrected Find similar articles Similar articles in Web of Science Add to my archive Download citation Request Permissions Citing Articles Load citing article information Citing articles via CrossRef Citing articles via Scopus Citing articles via Web of Science Citing articles via Google Scholar Google Scholar Articles by Mubarak, J. A. Search for related content Related Content E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements Load related web page information Share Email this article CiteULike Delicious Facebook Google+ Mendeley Twitter What's this? Search this journal: Advanced » Current Issue November 2015 24 (5) Alert me to new issues The Journal About this journal AERC/Journal of African Economies, Visiting Scholars Programme Rights & Permissions Dispatch date of the next issue We are mobile – find out more This journal is a member of the Committee on Publication Ethics (COPE) Journals Career Network Published on behalf of The Centre for the Study of African Economies Impact factor: 0.761 5-Yr impact factor: 0.933 Turnaround Statistics Over the last three and a half years, 56% of submissions to JAE received a decision within 31 days and 73% within 61 days of submission. Over the same period, 64% of initial submissions were rejected after internal review. Of the submissions sent for review, 27% were eventually accepted for publication after revision. During the same period the average time from receipt at OUP to online publication was approximately 42 days. Editor-in-Chief Douglas Gollin View full editorial board For Authors Submit now! Instructions to authors Online submission instructions Self-archiving policy Alerting Services Email table of contents Email Advance Access CiteTrack XML RSS feed Corporate Services Advertising sales Reprints Supplements var taxonomies = ("SOC00710", "SOC00810", "SOC02440"); Most Most Read Can Africa Industrialise? Institutions and African Economies: An Overview Unemployment in South Africa, 1995 2003: Causes, Problems and Policies Crises, Economic Integration and Growth Collapses in African Countries Households' Income-Generating Activities and Marginal Returns to Labour in Rural Tanzania » View all Most Read articles Most Cited Why are there so many civil wars in Africa? Understanding and preventing violent conflict Sources of Slow Growth in African Economies Economic and Welfare Impact of the Abolition of Health User Fees: Evidence from Uganda Bypassing Health Centres in Tanzania: Revealed Preferences for Quality Urban-Rural Inequality in Living Standards in Africa » View all Most Cited articles Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department. Online ISSN 1464-3723 - Print ISSN 0963-8024 Copyright © 2015 Centre for the Study of African Economies Oxford Journals Oxford University Press Site Map Privacy Policy Cookie Policy Legal Notices Frequently Asked Questions Other Oxford University Press sites: Oxford University Press Oxford Journals China Oxford Journals Japan Academic & Professional books Children's & Schools Books Dictionaries & Reference Dictionary of National Biography Digital Reference English Language Teaching Higher Education Textbooks International Education Unit Law Medicine Music Online Products & Publishing Oxford Bibliographies Online Oxford Dictionaries Online Oxford English Dictionary Oxford Language Dictionaries Online Oxford Scholarship Online Reference Rights and Permissions Resources for Retailers & Wholesalers Resources for the Healthcare Industry Very Short Introductions World's Classics function fnc_onDomLoaded() { var query_context = getQueryContext(); PF_initOIUnderbar(query_context,":QS:default","","JRN"); PF_insertOIUnderbar(0); }; if (window.addEventListener) { window.addEventListener('load', fnc_onDomLoaded, false); } else if (window.attachEvent) { window.attachEvent('onload', fnc_onDomLoaded); } var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E")); try { var pageTracker = _gat._getTracker("UA-189672-16"); pageTracker._setDomainName(".oxfordjournals.org"); pageTracker._trackPageview(); } catch(err) {} http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of African Economies Oxford University Press

A Case of Private Supply of Money in Stateless Somalia

Journal of African Economies , Volume 11 (3) – Sep 1, 2002

Loading next page...
 
/lp/oxford-university-press/a-case-of-private-supply-of-money-in-stateless-somalia-Kx60JquvMQ
Publisher
Oxford University Press
Copyright
Copyright © 2015 Centre for the Study of African Economies
ISSN
0963-8024
eISSN
1464-3723
DOI
10.1093/jae/11.3.309
Publisher site
See Article on Publisher Site

Abstract

Since the collapse of the state in 1991 and the subsequent crash of the domestic currency, the Somali economy starved for liquidity to facilitate economic recovery and means to replace ageing banknotes. In the long absence of effective state authority, forged banknotes from factions competed to fill the void and became accepted. In much the way that Milton Friedman predicted, the consequent unregulated private supply of money seeking to capture seignoirage income soon raised prices, destabilised domestic markets, eroded the market value of Somali shilling banknotes and reduced it to pure commodity money. However, the experience did not lead to an infinite price level simply because the money issuers were unwilling to add zeros to denominations in fear that the public will not accept them. Rather, as the marginal cost of importing and injecting new reprints on existing highest denomination neared its exchange value, the incentive to import more banknotes subsided, and domestic prices started to stabilise. Incredibly, at this very low exchange value, the Somali currency survives and retains its service value, and real cash balances have actually increased. Copyright Oxford University Press 2002 « Previous | Next Article » Table of Contents This Article J Afr Econ (2002) 11 (3): 309-325. doi: 10.1093/jae/11.3.309 » Abstract Free Full Text (PDF) Free Classifications Article Services Article metrics Alert me when cited Alert me if corrected Find similar articles Similar articles in Web of Science Add to my archive Download citation Request Permissions Citing Articles Load citing article information Citing articles via CrossRef Citing articles via Scopus Citing articles via Web of Science Citing articles via Google Scholar Google Scholar Articles by Mubarak, J. A. Search for related content Related Content E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements Load related web page information Share Email this article CiteULike Delicious Facebook Google+ Mendeley Twitter What's this? Search this journal: Advanced » Current Issue November 2015 24 (5) Alert me to new issues The Journal About this journal AERC/Journal of African Economies, Visiting Scholars Programme Rights & Permissions Dispatch date of the next issue We are mobile – find out more This journal is a member of the Committee on Publication Ethics (COPE) Journals Career Network Published on behalf of The Centre for the Study of African Economies Impact factor: 0.761 5-Yr impact factor: 0.933 Turnaround Statistics Over the last three and a half years, 56% of submissions to JAE received a decision within 31 days and 73% within 61 days of submission. Over the same period, 64% of initial submissions were rejected after internal review. Of the submissions sent for review, 27% were eventually accepted for publication after revision. During the same period the average time from receipt at OUP to online publication was approximately 42 days. Editor-in-Chief Douglas Gollin View full editorial board For Authors Submit now! Instructions to authors Online submission instructions Self-archiving policy Alerting Services Email table of contents Email Advance Access CiteTrack XML RSS feed Corporate Services Advertising sales Reprints Supplements var taxonomies = ("SOC00710", "SOC00810", "SOC02440"); Most Most Read Can Africa Industrialise? Institutions and African Economies: An Overview Unemployment in South Africa, 1995 2003: Causes, Problems and Policies Crises, Economic Integration and Growth Collapses in African Countries Households' Income-Generating Activities and Marginal Returns to Labour in Rural Tanzania » View all Most Read articles Most Cited Why are there so many civil wars in Africa? Understanding and preventing violent conflict Sources of Slow Growth in African Economies Economic and Welfare Impact of the Abolition of Health User Fees: Evidence from Uganda Bypassing Health Centres in Tanzania: Revealed Preferences for Quality Urban-Rural Inequality in Living Standards in Africa » View all Most Cited articles Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department. Online ISSN 1464-3723 - Print ISSN 0963-8024 Copyright © 2015 Centre for the Study of African Economies Oxford Journals Oxford University Press Site Map Privacy Policy Cookie Policy Legal Notices Frequently Asked Questions Other Oxford University Press sites: Oxford University Press Oxford Journals China Oxford Journals Japan Academic & Professional books Children's & Schools Books Dictionaries & Reference Dictionary of National Biography Digital Reference English Language Teaching Higher Education Textbooks International Education Unit Law Medicine Music Online Products & Publishing Oxford Bibliographies Online Oxford Dictionaries Online Oxford English Dictionary Oxford Language Dictionaries Online Oxford Scholarship Online Reference Rights and Permissions Resources for Retailers & Wholesalers Resources for the Healthcare Industry Very Short Introductions World's Classics function fnc_onDomLoaded() { var query_context = getQueryContext(); PF_initOIUnderbar(query_context,":QS:default","","JRN"); PF_insertOIUnderbar(0); }; if (window.addEventListener) { window.addEventListener('load', fnc_onDomLoaded, false); } else if (window.attachEvent) { window.attachEvent('onload', fnc_onDomLoaded); } var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "google-analytics.com/ga.js' type='text/javascript'%3E%3C/script%3E")); try { var pageTracker = _gat._getTracker("UA-189672-16"); pageTracker._setDomainName(".oxfordjournals.org"); pageTracker._trackPageview(); } catch(err) {}

Journal

Journal of African EconomiesOxford University Press

Published: Sep 1, 2002

There are no references for this article.