Discussion paper

DP1121 Causality Implications of the Public-Finance Approach to Inflation and Seigniorage

Recent empirical tests of dynamic optimal seigniorage models focus on their `smoothing' and long-run implications. The models also imply that the optimal policies are forward looking; that is seigniorage revenues depend on expected future government expenditures. We report causality tests of forward-looking policies for Germany, France, Italy, the United Kingdom and the United States.

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Citation

Diba, B and P Martin (1995), ‘DP1121 Causality Implications of the Public-Finance Approach to Inflation and Seigniorage‘, CEPR Discussion Paper No. 1121. CEPR Press, Paris & London. https://cepr.org/publications/dp1121