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Seigniorage in Europe


  • Vittorio U. Grilli


In this paper, based on the experience of ten European countries, we study the relevance of seigniorage revenues in the recent past, and we speculate about their importance in the near future. We find that the members of the European community differ widely in the way they manage monetary policies. While for some of the European countries we could not identify any consistent seigniorage policy, for others seigniorage appears to have been an important component of their financing policies. This lack of consensus about the role of monetary policies is a potential source of conflict in designing common exchange rate policies. A formal analysis of the current status of the finances of the governments of the ten European countries also revealed that several of them are now following budget policies that are potentially incompatible with their long run solvency. This also represents a major obstacle toward monetary unification on exchange rate stability. Member countries will be faced with quite different needs for revenues and eliminating a (politically) flexible instrument like siegniorage may result in an unstable situation.

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  • Vittorio U. Grilli, 1988. "Seigniorage in Europe," NBER Working Papers 2778, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2778
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    References listed on IDEAS

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    Cited by:

    1. Burret, Heiko T. & Feld, Lars P. & Köhler, Ekkehard A., 2016. "(Un-)Sustainability of Public Finances in German Laender: A Panel Time Series Approach," Economic Modelling, Elsevier, vol. 53(C), pages 254-265.
    2. Nolivos, Roberto Delhy & Vuletin, Guillermo, 2014. "The role of central bank independence on optimal taxation and seigniorage," European Journal of Political Economy, Elsevier, vol. 34(C), pages 440-458.
    3. Jakob Korbinian Eberl, 2016. "The Collateral Framework of the Eurosystem and Its Fiscal Implications," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 69, April.
    4. Brian J. Cody, 1991. "Seignorage And European Monetary Union," Contemporary Economic Policy, Western Economic Association International, vol. 9(2), pages 72-80, April.
    5. Brian J. Cody, 1991. "Seignorage And European Monetary Union," Contemporary Economic Policy, Western Economic Association International, vol. 9(1), pages 72-80, January.

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