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Seigniorage revenue and monetary policy: some preliminary evidence

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  • Joseph H. Haslag

Abstract

Producing new money is inexpensive, making seigniorage--the revenues earned from creating new money--attractive. However, the social costs of faster money creation most likely are greater than the production costs. These marginal social costs may put limits on how much real seigniorage revenue the government can earn. In this article, Joseph Haslag looks across countries to assess the typical reliance on seigniorage revenue. In addition, Haslag determines whether countries with combinations of high rates of money growth and high reserve requirements tend to rely especially heavily on seigniorage revenue.

Suggested Citation

  • Joseph H. Haslag, 1998. "Seigniorage revenue and monetary policy: some preliminary evidence," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q III, pages 10-20.
    • Handle: RePEc:fip:fedder:y:1998:i:qiii:p:10-20
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    References listed on IDEAS

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    1. Fischer, Stanley, 1982. "Seigniorage and the Case for a National Money," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 295-313, April.
    2. W. Michael Cox, 1992. "Two types of paper: the case for Federal Reserve independence," Southwest Economy, Federal Reserve Bank of Dallas, issue Nov, pages 4-8.
    3. Champ,Bruce & Freeman,Scott & Haslag,Joseph, 2016. "Modeling Monetary Economies," Cambridge Books, Cambridge University Press, number 9781316508671.
    4. Seater, John J., 1985. "On the construction of marginal federal personal and social security tax rates in the U.S," Journal of Monetary Economics, Elsevier, vol. 15(1), pages 121-135, January.
    5. John Bryant & Neil Wallace, 1984. "A Price Discrimination Analysis of Monetary Policy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(2), pages 279-288.
    6. Edwards, Sebastian & Tabellini, Guido, 1991. "Explaining fiscal policies and inflation in developing countries," Journal of International Money and Finance, Elsevier, vol. 10(1, Supple), pages 16-48, March.
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    Cited by:

    1. Bossone, Biagio, 2021. "Commercial bank seigniorage and the macroeconomy," International Review of Financial Analysis, Elsevier, vol. 76(C).
    2. Carmelo Ferlito, 2022. "Axel Leijonhufvud: A personal recollection from an Austrian perspective," PSL Quarterly Review, Economia civile, vol. 75(302), pages 299-310.
    3. Miglo, Anton, 2004. "Pecking order theory for government finance," MPRA Paper 89017, University Library of Munich, Germany, revised 2018.
    4. Basu, Parantap, 2001. "Reserve Ratio, Seigniorage and Growth," Journal of Macroeconomics, Elsevier, vol. 23(3), pages 397-416, July.

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