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Euroisation. Assessing the Loss of Seigniorage and the Impact on the Interest Premium in Central European Countries

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  • Franziska Schobert

Abstract

The loss of seigniorage and possible reductions in interest premiums are regarded as the most direct financial consequences of euroisation. The measurement of seigniorage depends on the chosen concept which in this study concentrates on the net revenues actually distributed to the fiscal authorities. Possible reductions in interest premiums are calculated by assuming that part of the default risk is due to the risk of default in case of a currency crisis. It is concluded that losses on seigniorage, but also potential benefits on the reduction of interest rates, are rather low for a group of more advanced eu accession countries in Central Europe and that they should not be important criteria for their governments considering euroisation.

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  • Franziska Schobert, 2003. "Euroisation. Assessing the Loss of Seigniorage and the Impact on the Interest Premium in Central European Countries," Revue économique, Presses de Sciences-Po, vol. 54(5), pages 913-935.
    • Handle: RePEc:cai:recosp:reco_545_0913
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    2. Samuel Demeulemeester, 2020. "Would a State Monopoly Over Money Creation Allow for a Reduction of National Debt? A Study of the “Seigniorage Argument” in Light of the “100% Money” Debates," Research in the History of Economic Thought and Methodology, in: Research in the History of Economic Thought and Methodology: Including a Symposium on Public Finance in the History of Economic Thought, volume 38, pages 123-144, Emerald Group Publishing Limited.

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