Financial Repression, Inflation and Seigniorage: The Polish Experience
A small analytic framework is build to analyse the relation between reserve requirements, inflation, and seigniorage revenues. From the analysis we can derive steady-state seigniorage revenues as a function of the rate of inflation and the intensity of financial repression. The framework is applied to the case of Poland that has undertaken a rapid transition to a market economy and implemented a substantial financial sector reform.
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