Such restrictions exist, so it is suggested, in order to enable government to collect revenues through seignorage
, and play no role in promoting the economic welfare of individuals.
In the context of discussing seignorage
, it may be worth trying to insist that a negative paper currency interest rate is not a tax if it simply equals the target rate.
The monopoly right to create money generates a "seignorage
tax," whose capital value is roughly 100 percent of the US gross domestic product, according to the IMF calculations.
provides the [CFPB's] funds out of the Fed's seignorage
The model is developed under the following two main assumptions: the revenue raised by seignorage
is not rebated back to the agents and policy variables are stochastic.
To the extent that the crisis has expanded the demand for base money, this would have facilitated the financing of fiscal deficits through seignorage
, rather than by drawing down foreign exchange reserves.
(1.) If, after engaging in quantitative easing, the Federal Reserve were to wish to tighten monetary policy sharply, then losses on asset sales or interest on reserves would lower the seignorage
payments made to the Treasury, perhaps substantially.
Kime, Kevin M 1998 'Seignorage
, domestic debt, and financial reform in China', Contemporary Economic Policy 16(1):12-21.
The new currency would therefore result in seignorage
gains for the MENA oil-exporting governments as oil and gas importers acquired treasury bills, bonds, and other sovereign issues.
Fisher provided a new rationale for an old practice of debasing the coinage called seignorage
So, clearly, by means of this 'bold' device, the hypothetical plan was to attract to the financial and physical markets of the United States liquidity that had, for the time being, vanished 'underground.' In this connection, the Bank of England speculated, most interestingly, that a carry tax on US dollars, 70 per cent of which are held abroad, would also bring in significant revenue from the chests of foreign investors and central banks ('external seignorage
'), as well as from the criminal economy--itself invoicing most of its transactions in greenbacks.