Seigniorage in the EC: The Implications of the EMS and Financial Market Integration

International Monetary Fund

No 1989/007, IMF Working Papers from International Monetary Fund

Abstract: The paper measures the effects of the integration of European financial markets and lower inflation in the EMS on the revenue from seigniorage for the EC member countries with particular focus on the high inflation countries. Assuming that by 1992 all EC members participate fully in the EMS and reserve requirements are unified, the revenue from seigniorage will be reduced by about 2 percentage points of GDP in Greece and Portugal and 0.5-0.8 percentage points in Italy and Spain. Two different measures of seigniorage yield similar results regarding the change, but differ regarding the level.

Keywords: WP; GDP; inflation rate; cash flow; financial market integration; fiat money; EC country; GDP ratio; double digit inflation rates; Currencies; Financial integration; Inflation; Reserve requirements; Reserve currencies; Europe (search for similar items in EconPapers)
Pages: 20
Date: 1989-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1989/007

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