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Senhoriagem ou soberania?

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  • Wray, L. Randall

Abstract

This paper contrasts the well known concept of seigniorage with sovereignty. The sovereignty approach links the State?s ability to issue a currency denominated in the unit of account it has chosen, without any explicit guarantee that the currency will be converted to anything, to a fundamental power that is directly associated with sovereign nations. Any sovereign State that has the ability to impose tax liabilities will be able to issue a fiat money, to exogenously maintain overnight interest rates, and to deficit spend, purchasing goods and services by crediting bank reserves. It will never need to borrow before it can spend. Many nations have chosen not to exercise this sovereign power, choosing instead to fix exchange rates, to issue government debt denominated in a foreign currency, or to operate with a currency board. This paper will show why this is a mistake, and will argue that the sovereignty approach offers insights into operation of modern money systems that the notion of seigniorage cannot provide.

Suggested Citation

  • Wray, L. Randall, 2002. "Senhoriagem ou soberania?," Revista Economia e Sociedade, Instituto de Economia, Universidade Estadual de Campinas (UNICAMP), vol. 19, pages 1-19, January.
    • Handle: RePEc:euc:ancoec:wpaper:1163
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    References listed on IDEAS

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    1. Perry Mehrling, 2000. "Modern Money: Fiat or Credit?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 22(3), pages 397-406, March.
    2. Stephanie Bell, 2000. "Do Taxes and Bonds Finance Government Spending?," Journal of Economic Issues, Taylor & Francis Journals, vol. 34(3), pages 603-620, September.
    3. Charles Goodhart, 1989. "Money, Information and Uncertainty: 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262071223, December.
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