Seigniorage in a Cross-Section of Countries

Journal of Money, Credit, and Banking, Vol. 30, No. 2 (May 1998)

Posted: 19 Jan 1998

See all articles by Reid W. Click

Reid W. Click

George Washington University - Department of International Business

Abstract

Empirical investigation of the average level of seigniorage in a cross-section of (up to) ninety countries for the period 1971-1990 suggests that optimum tax theory explains up to forty percent of the cross-country variation in seigniorage, since seigniorage is higher where its deadweight losses are probably lower and where deadweight losses from conventional taxation are probably higher, but that average government spending is not a determinant of seigniorage. Practical concerns about financing transitory government spending explain some of the remaining variation in seigniorage, and central bank independence and political instability are useful as well. In contrast, ninety percent of the cross-country variation in conventional taxation appears to be determined by the level of government spending and deadweight losses, and additional variables do not add to the results.

JEL Classification: E63, E52

Suggested Citation

Click, Reid William, Seigniorage in a Cross-Section of Countries. Journal of Money, Credit, and Banking, Vol. 30, No. 2 (May 1998), Available at SSRN: https://ssrn.com/abstract=49253

Reid William Click (Contact Author)

George Washington University - Department of International Business ( email )

2201 G Street NW Suite 401
Washington, DC 20052
United States
202-994-0656 (Phone)
202-994-7422 (Fax)

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