Glossary of economics research
Results of search for seignorage follow:
seignorage:
"The amount of real purchasing power that [a] government can extract from
the public by printing money."" -- Cukierman 1992
Explanation: When a government prints money, it is in essence borrowing
interest-free since it receives goods in exchange for the money, and must
accept the money in return only at some future time. It gains further if
issuing new money reduces (through inflation) the value of old money by
reducing the liability that the old money represents. These gains to a
money-issuing government are called "seignorage" revenues.
The original meaning of seignorage was the fee taken by a money issuer (a
government) for the cost of minting the money. Money itself, at that time,
was intrinsically valuable because it was made of metal.
Source: Cukierman, 1992
Contexts: money
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