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The Connection between the Increase in Foreign Reserves around the Globe and the U.S Collection of Seignorage Revenue

Author

Listed:
  • Winer Zvi
  • Ben David Evyatar
  • Ben David Nissim

Abstract

This paper sheds light on the large seignorage revenue collected by the U.S government resulting from the increase in dollar holding by foreign governments in their foreign reserves. In order to explore the connections between U.S seignorage revenue and other countries foreign reserves we estimated an equation linking between the foreign reserves of several foreign countries and the US monetary base. Our results show a strong connection between the foreign reserves of China, Japan and UK and the US monetary base.

Suggested Citation

  • Winer Zvi & Ben David Evyatar & Ben David Nissim, 2018. "The Connection between the Increase in Foreign Reserves around the Globe and the U.S Collection of Seignorage Revenue," Business and Economic Research, Macrothink Institute, vol. 8(1), pages 244-252, March.
    • Handle: RePEc:mth:ber888:v:8:y:2018:i:1:p:244-252
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    References listed on IDEAS

    as
    1. Michael P. Dooley & David Folkerts-Landau & Peter M. Garber, 2005. "An essay on the revived Bretton Woods system," Proceedings, Federal Reserve Bank of San Francisco, issue Feb.
    2. 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.
    3. Paul Krugman, 2007. "Will there be a dollar crisis? [‘Current account fact and fiction’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 22(51), pages 436-467.
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    More about this item

    Keywords

    Seignorage; Foreign reserves;

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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