Please use this identifier to cite or link to this item: http://hdl.handle.net/1822/2747

TitleThe political economy of seigniorage
Author(s)Veiga, Francisco José
Aisen, Ari
KeywordsSeigniorage
Political instability
Institutions
Issue date2005
PublisherUniversidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
Series/Report no.NIPE Working Paper series ;
12
Abstract(s)While most economists agree that seigniorage is one way governments finance deficits, there is less agreement about the political, institutional and economic reasons for relying on it. This paper investigates the main determinants of seigniorage using panel data on about 100 countries, for the period 1960-1999. Estimates show that greater political instability leads to higher seigniorage, especially in developing, less democratic and socially-polarized countries, with high inflation, low access to domestic and external debt financing and with higher turnover of central bank presidents. One important policy implication of this study is the need to develop institutions conducive to greater economic freedom as a means to lower the reliance on seigniorage financing of public deficits.
TypeWorking paper
URIhttp://hdl.handle.net/1822/2747
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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