International Seigniorage Payments

Benjamin Eden ()

No 622, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: What are the "liquidity services" provided by �over-priced� assets? How do international seigniorage payments affect the choice of monetary policies? Does a country gain when other hold its �over-priced� assets? These questions are analyzed here in a model in which demand uncertainty (taste shocks) and sequential trade are key. It is shown that a country with a relatively stable demand may issue "over priced" debt and get seigniorage payments from countries with unstable demand. But this does not necessarily improve welfare in the stable demand country.

Keywords: Seigniorage; liquidity; rate of return dominance; optimal monetary policy (search for similar items in EconPapers)
JEL-codes: E42 F00 G00 H62 (search for similar items in EconPapers)
Date: 2006-11
New Economics Papers: this item is included in nep-cba and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.accessecon.com/pubs/VUECON/vu06-w22.pdf First version, 2006 (application/pdf)

Related works:
Working Paper: International Seigniorage Payments (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0622

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