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Seigniorage payments and the Federal Reserve’s new operating regime

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  • Cutsinger, Bryan P.
  • Luther, William J.

Abstract

We consider the Federal Reserve’s remittances to the Treasury and extend the estimates offered by Barro (1982) and Jefferson (1998) to assess the net effect of the Fed’s new operating regime on seigniorage payments. Most measures indicate that the Fed’s new operating regime has increased the level of seigniorage and its relative importance in total tax receipts. Whether seigniorage from domestic and foreign holdings of U.S. currency has become more or less important as a source of revenue depends on the measure of seigniorage used.

Suggested Citation

  • Cutsinger, Bryan P. & Luther, William J., 2022. "Seigniorage payments and the Federal Reserve’s new operating regime," Economics Letters, Elsevier, vol. 220(C).
    • Handle: RePEc:eee:ecolet:v:220:y:2022:i:c:s0165176522003548
    DOI: 10.1016/j.econlet.2022.110880
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    References listed on IDEAS

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    Cited by:

    1. Louis Rouanet & Peter Hazlett, 2023. "The redistributive politics of monetary policy," Public Choice, Springer, vol. 194(1), pages 1-26, January.

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    More about this item

    Keywords

    Seigniorage; Federal Reserve; Dollar; Interest on reserves; Floor system;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence

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