Abstract
Central banks publish profit figures that are invariably well below the amounts implied by calculations of their seigniorage revenue. Most of the difference is due to the impairment of central bank balance sheets by the acquisition of substandard assets and of liabilities not matched by assets of equal value. In the limit, a central bank can go bust when it has acquired liabilities of greater market value than the present value of its seigniorage revenue calculated for any steady-state inflation rate. An insolvent central bank can continue to service its liabilities only through accelerating inflation. Copyright 1992 by Blackwell Publishers Ltd and The Victoria University of Manchester
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
