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The role of monetary policy in the United Arab Republic 1952-64.

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posted on 2015-11-19, 09:11 authored by M. E. Elgharib
The role of monetary policy in developing countries is quite different from its role in advanced countries. Its role in a private enterprise economy differs from that in a planned socialist economy with a growing public sector. The U.A.R. has experienced the transformation from a purely private enterprise economy, up to 1955/56, to a planned socialist economy after 1959/60, with a transitional period from the former system to the latter in between. The period covered by this study (1952-64) therefore is of special interest since it embraced far reaching changes in all aspects of economic life. This study is divided into two parts. The first is subdivided into four chapters. The economic and banking structures of the U.A.R. are dealt with in chapters I and II. In chapter III the determinants of the money supply and its change are closely examined. The understanding of the behavioural processes which determine the supply of money is an obvious prerequisite to selecting the most efficient instrument of monetary policy. The factors that determine the demand for money are examined in chapter IV. The conclusion which emerges from the analysis concerning the demand for money in the U.A.R. is that the simple 'Keynesian' inverse relationship between the money/income ratio and the rate of interest on bonds is not found because of the many complex forces affecting both variables during the period covered by this study. The analysis of the demand for money is iii dealt with in a wider framework embracing the shift between assets with money treated as one asset among many. Part II comprises three chapters all dealing with monetary policy. Its objectives, instruments, techniques, limitations and dilemmas are examined in chapter V. In chapters VI and VII, the role of monetary policy in the U.A.R. in the pre-planning period and during the first five-year plan is examined. The resort to economic planning partly stems from the failure of monetary policy to achieve its objectives. Monetary policy cannot be left alone to do the job, i.e., to maintain a high and steady rate of economic growth along with internal and external stability. It is however, an integral part of the country's economic policy and must be co-ordinated with other economic policies like fiscal and incomes policies as well as direct controls.


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University of Leicester

Qualification level

  • Doctoral

Qualification name

  • PhD



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