Ražebné ve spojitém čase

Seigniorage in continuous time

Petr Mach and Tomáš Hanzák

Politická ekonomie, 2004, vol. 2004, issue 4, 531-536

Abstract: The government is able to acquire real goods through printing money. Because government does not create wealth through printing money, this revenue, the seigniorage, is at the expense of the public, as the purchasing power of monetary units decreases because of the issue of new money. The authors use the model of auctions to which the public comes with their money and the government with the newly issued money. The value of goods acquired by the government in such an auction equals the newly printed money divided by the sum of the newly printed money and the money spent by the public. Upon this auction model, the authors develop the formula for seigniorage in continuous time. The seigniorage calculated in this way is lower than the seigniorage calculated upon the assumption of discrete changes in economic variables.

Keywords: seigniorage; inflation tax; money issue (search for similar items in EconPapers)
JEL-codes: E5 (search for similar items in EconPapers)
Date: 2004
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DOI: 10.18267/j.polek.473

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