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As seigniorage (pronounced [ zɛnjoraːʒ (ə) ]) or seigniorage , historically also seigniorage , seigniorage or strike rate , which is the central bank posted profits designated by the emission of central bank money is created.


The term is derived from the French word seigneur for feudal lord or feudal lord , since in the Middle Ages they had the exclusive right to mint coins (the so-called coin shelf ). The mint's profit from the creation of money was a result of the difference between the value of metal and production costs on the one hand and the value of the coins issued on the other. Since the feudal lord usually had the minting monopoly for coins, he also had the seigniorage profit.

The (to be striven for) level of this treasure trove is discussed intensively in the early economic literature. First of all, the justification of a moderate seigniorage is undisputed. On the one hand, it is necessary to cover the costs of the coinage, so that these are not to be borne by the general public. On the other hand, there is the benefit of the minting: a coin has a higher utility value than a piece of unminted precious metal of the same weight. If the seigniorage is lower than in neighboring countries, there was fear of an outflow of coins into neighboring countries. Excessive seigniorage leads (similar to coin deterioration ) to inflation . -See Kippertaler and Kursächsische Kippermünzstätten .

Forms of seigniorage

Seigniorage can be viewed from different perspectives and can therefore be defined differently.

Monetary seigniorage

Monetary seigniorage is the increase in the nominal amount of central bank money:

"Seigniorage is the real income that the state or central bank can achieve thanks to the central bank monopoly due to the fact that private individuals hold central bank money without interest."

- Otmar Issing : Introduction to monetary theory

The seigniorage S defined in this way is calculated by adjusting the amount of central bank money created during the period for inflation:

, where m = the increase in the central bank money supply, M = the central bank money supply and P = the price level.

Since the nominal money demand is expanded by inflation and economic growth (see quantity equation ), the central bank money supply and thus the monetary seigniorage increases due to these factors. Therefore, the seigniorage can be broken down into a growth component and an inflation component. The second component acts like an inflation tax .

The monetary seigniorage does not correspond to the central bank's profit from central bank money creation. Non-interest-bearing minimum reserves of credit institutions at the central bank also contribute to this profit .

Fiscal seigniorage

Fiscal seigniorage is understood to mean the state's income from monetary seigniorage. While historically the right to issue notes was also granted to private central banks (and the fiscal seigniorage then consisted of the concession fees of private central banks), today there is a central bank monopoly for the creation of cash almost everywhere. Therefore only part of the seigniorage flows directly to the central bank (with regard to banknotes and central bank balances) and the state as the owner of the coin rack (with regard to coins).

However, the seigniorage always flows indirectly to the state. If the state has direct access to the central bank, it can use the newly created funds directly. In the case of independent central banks, the state receives the seigniorage through the distribution of the central bank's profits. In 1987, for example, the UK Treasury was able to budget the equivalent of newly printed banknotes and coins at £ 1.05 billion . In the same year, banknotes worth DM 11.9 billion were reissued in Germany. However, the German federal government could only dispose of the Bundesbank profit of DM 0.3 billion. The profit from the banknotes already arises when the central bank money behind it is created and is therefore much lower than the value printed on it. It consists of the interest gain, since cash does not generate any interest, and not of the difference in value between paper value and production costs on the one hand and the printed value on the other.

The seigniorage thus represents part of the state revenue . The effect of the seigniorage corresponds to a tax on cash holdings. In the Public Finance An optimal seigniorage is achieved if the social: hence a concept of "optimal seigniorage" is discussed marginal cost (. Eg a distortion of the control information of prices or the creation of inflation) in accordance with the seigniorage those of the other taxes. It can be empirically established that the seigniorage in countries with inefficient tax systems does indeed make a greater contribution to the financing of government spending than in countries with effective tax systems.

Alternative cost concept of the Seigniorage

The seigniorage can also be defined using opportunity costs . From the perspective of private households, the seigniorage corresponds to the costs of holding cash, i.e. the lost interest that could be achieved with an interest-bearing secure investment.

, where i = the safe overnight interest rate, M = the central bank money supply and p = the price level.

This corresponds to the calculation of the cash holdings in the central bank's balance sheet . The cash holdings are passivated there . According to the market interest rate method , the condition contribution corresponds to the overnight rate , since the banknotes do not bear interest.

Opportunity costs of holding money arise not only for private households, but also for commercial banks, provided that their deposits at the central bank are interest-free or the interest rate is below the alternative interest rate.

See also

Web links

Wiktionary: Seigniorage  - explanations of meanings, word origins, synonyms, translations

Individual evidence

  1. ^ John Ramsay McCulloch: Money and Banks, Leipzig 1859, reprint 1970, p. 24.
  2. ^ Otmar Issing : Introduction to Money Theory , 14th edition 2007, ISBN 9783800633661 , pp. 266-268.
  3. a b M. Klein, MJM Neumann: Seigniorage: What is it and who gets it ; in: Weltwirtschaftliches Archiv, Volume 126 (1990 II), pp. 205-221.
  4. Hans-Joachim Jarchow : Theory & Practice of Money , 11th Edition, pp. 304-310.