Detailed Information on Publication Record
2023
An error in the theory of seigniorage
MACH, PetrBasic information
Original name
An error in the theory of seigniorage
Name in Czech
Chyba v teorii ražebného
Authors
MACH, Petr (203 Czech Republic, guarantor, belonging to the institution)
Edition
International Journal of Economic Sciences, Praha, EUROPEAN RESEARCH CENTER (EURREC), 2023, 1804-9796
Other information
Language
English
Type of outcome
Článek v odborném periodiku
Field of Study
50201 Economic Theory
Country of publisher
Czech Republic
Confidentiality degree
není předmětem státního či obchodního tajemství
References:
RIV identification code
RIV/04274644:_____/23:#0001046
Organization unit
University of Finance and Administration
UT WoS
001123624300001
Keywords (in Czech)
Měnová teorie; měnová báze; ražebné; inflační daň; Lafferova křivka
Keywords in English
Monetary Theory; Monetary Base; Seigniorage; Inflation Tax; Laffer curve
Tags
Tags
Reviewed
Změněno: 13/2/2024 13:58, Mgr. Jitka Štruncová
V originále
The article reveals an error in the theory of seigniorage or government revenue from printing money. Friedman, Cagan, Mankiw, and other economists have repeated the definition of seigniorage as the monetary base multiplied by the rate of inflation (or by the growth in the monetary base). This definition, however, contains a logical error in the formula of seigniorage, confusing the growth rate with the growth rate divided by the growth rate plus one. This often-repeated confusion is consequently common in modern economics textbooks. These many authors have omitted Keynes who – almost one hundred years ago – rightly understood seigniorage to be the monetary base multiplied by the rate of money growth divided by the rate of money growth plus one. This paper presents an unambiguous definition and formula of seigniorage and offers a graphical illustration of seigniorage as a function of monetary growth which corresponds to Keynes’s approach. It is shown that such a graph is an analogy to the Laffer curve in explicit taxation.
In Czech
Článek se zabývá inflační daní a upozorňuje, že v literatuře často používaný vzorec obsahuje chybu. Autor formuluje křivku ražebného jako funkci podílu ražebného na HDP a tempa růstu měnové báze.