Seigniorage: What is it and who gets it?

Klein, Martin; Neumann, Manfred J. M.

doi:10.1007/bf02706356

Cited by 62 publications

(59 citation statements)

References 10 publications

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“…13 There are two concepts for the calculation of seigniorage (Klein/Neumann, 1990): (i) The opportunity cost concept considers seigniorage as the interest expense saved by the government if it obtains an interest-free loan from the central bank. Seigniorage is thus equal to the nominal interest rate on government bonds times the real stock of base money; (ii) monetary seigniorage treats the revenue of the government as the change in the real stock of money.…”

Section: The Endogeneity Of Money Supplymentioning

confidence: 99%

Russian monetary policy – assessing the track record

Buch¹

1998

Economics Systems

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractSince early 1995, monetary stabilization has gradually been achieved in Russia. Extremely high real interest rate have been maintained throughout autumn 1996, an exchange rate target has been adhered to since mid-1995, auctions of Central Bank credit have gained in importance, and subsidized lending has been cut down. However, the conduct of monetary policy remains a trial-and-error process: Indirect budget financing through the CBR still occurs, the fixed exchange rate regime has caused a lack of control over the monetary base, and the money multiplier is relatively unstable. Preliminary empirical evidence shows that money demand has remained relatively stable since the beginning of reforms. Still, short-run fluctuations of money demand are substantial, and further portfolio adjustments are likely if inflationary expectations decline and if the capital account becomes more open. The success of monetary stabilization crucially depends on the effectiveness with which the CBR can defend its independence. Because financial sector stability is an important condition for a predictable and stable monetary policy, further measures to restructure and to consolidate the banking sector need to be pursued in parallel to structural reforms of the Russian economy.(186 words)

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Section: The Endogeneity Of Money Supplymentioning

confidence: 99%

Russian monetary policy – assessing the track record

Buch¹

1998

Economics Systems

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“…There is no clear theoretical concept of seigniorage, the difficulty being to link monetary and fiscal aspects. Klein and Neumann (1990) incorporate both aspects and show that the correct magnitude of seigniorage transferred to the government cannot be determined by a simple formula such as the Cagantype that we use in the theoretical considerations. The same holds for the two concepts of seigniorage which are generally used, the so-called opportunity cost concept and the monetary seigniorage concept.…”

Section: Control Variables For the Success Of Monetary Reformmentioning

confidence: 99%

“…The same holds for the two concepts of seigniorage which are generally used, the so-called opportunity cost concept and the monetary seigniorage concept. Instead, a correct measure of seigniorage has to consider legal, institutional and operational details of money creation (Klein & Neumann, 1990). Only then the contribution of seigniorage to the public budget in different countries can be made fully comparable.…”

Section: Control Variables For the Success Of Monetary Reformmentioning

confidence: 99%

The credibility of monetary reform – New evidence

Freytag

2005

Public Choice

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The history of monetary policy is characterised by crisis and reform. The paper is dedicated to an explanation of what makes monetary reforms successful. A cross-sectional econometric analysis is chosen to deal with this problem. It is based on a standard macroeconomic model of commitment and credibility. As the dependent variable, we calculate a post-reform inflation rate. The exogenous variables are the degree of legal commitment, the constraining influence of institutions and a new variable for ex-ante credibility of the reform. The paper allows for the conclusion that monetary commitment, the consideration of institutional constraints and abstinence from the money press are crucial for the success of a monetary reform. Copyright Springer Science + Business Media, Inc. 2005

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“…3 We may characterize the concept starting from a general, encompassing definition of seigniorage, such as the one suggested by Drazen (1985) and later also by Klein and Neumann (1990). Drazen (1985, p. 328) defines "total revenues associated with money creation" as the algebraic sum of: a) "revenue from assets purchased due to money issue" where i is the nominal interest rate, A central bank assets, Y nominal GDP, π the inflation rate, g the growth rate of real GDP, and H the monetary base.…”

Section: Definitions Of Seignioragementioning

confidence: 99%