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Seigniorage Earnings of Commercial Banks and State Bank of Pakistan

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  • Arby, Muhammad Farooq

Abstract

The paper reviews the trend of seigniorage earnings by State Bank of Pakistan and commercial banks. It is found that seigniorage revenue of the SBP has declined overtime which indicates autonomy of the central bank as well as less reliance of the government on SBP’s resources for budget financing. In general, a direct relationship has been observed between seigniorage and inflation in Pakistan. However, at the two extremes of very high or very low inflation an inverse relation is detected.

Suggested Citation

  • Arby, Muhammad Farooq, 2006. "Seigniorage Earnings of Commercial Banks and State Bank of Pakistan," MPRA Paper 4955, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:4955
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    File URL: https://mpra.ub.uni-muenchen.de/4955/1/MPRA_paper_4955.pdf
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    References listed on IDEAS

    as
    1. Eckstein, Zvi & Leiderman, Leonardo, 1992. "Seigniorage and the welfare cost of inflation: Evidence from an intertemporal model of money and consumption," Journal of Monetary Economics, Elsevier, vol. 29(3), pages 389-410, June.
    2. Brennan, Geoffrey & Buchanan, James, 1981. "Revenue Implications of Money Creation under Leviathan," American Economic Review, American Economic Association, vol. 71(2), pages 347-351, May.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Hayat, Zafar & Balli, Faruk & Rehman, Muhammad, 2017. "The relevance and relative robustness of sources of inflation bias in Pakistan," Economic Modelling, Elsevier, vol. 63(C), pages 283-303.

    More about this item

    Keywords

    seigniorage; Inflation Tax; Pakistan;

    JEL classification:

    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General

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