Seigniorage


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Seigniorage

The amount of goods and services that the government obtains by printing new money in a given period. Often we consider this in real terms, by dividing the new money by the price level.

Seigniorage

The money a government generates when it prints more money. This usually is calculated as the difference between the face value of the money and the value of the bullion backing it.
References in periodicals archive ?
(8) Some much more recent contributors to the currency board literature have sought to play down the costs of the seigniorage problem by suggesting that, after adjusting for risk, differences in rates of return on domestic and foreign investments have not been significant.
Now, add in savings from reduced processing costs and seigniorage revenue, and subtract increased costs.
To compensate, to a certain extent, for the loss of seigniorage, central banks can also charge fees for giving a licence for issuers or start issuing e-cash themselves.
Accordingly, the chart shows that seigniorage revenue per year has been about one-third of 1 percent of GDP for Argentina, or U.S.$1.2 billion per year.
The seigniorage channel is the third channel of the monetization relation.
Another major reason for the high growth rates of money supply in LDCs is the revenue from seigniorage that the governments obtain through the right to create money.
and loss, but rather always generates seigniorage for every amount
Sargent and Wallace (1981) also report the non-neutrality of fiscal policy by identifying the effects of seigniorage on inflation and growth.
Additionally, the United States generates excessive seigniorage revenues as the dollar is still the most important reserve currency in the balance sheet of all major central banks.
"The grant component could be financed through contributions from euro area Member States equivalent to a share of the profits they make through the production of euro coins (seigniorage)," the Commission said.
Currency substitution also leads to the loss of seigniorage revenue.
Under game-theoretical perspectives, I'm sure that central banks would lose part, or all of their seigniorage rights, and in my point of view, this is where we're going.