Author (Person) | Hansen, Jørgen Drud, King, Roswitha M. |
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Series Title | Journal of Common Market Studies |
Series Details | Vol.45, No.5, December 2007, p999-1010 |
Publication Date | December 2007 |
ISSN | 0021-9886 |
Content Type | Journal | Series | Blog |
Abstract: The European Central Bank redistributes each year seigniorage from issuing euro notes to the National Central Banks of the euro countries. The key for this redistribution is, from 2008, based on the respective GDP and population proportions of the euro countries. Applying the distribution formula to the new EU countries from central and eastern Europe seems to give these countries a large net benefit compared with the seigniorage they bring in, i.e. their share of currency in circulation. However, as argued in this article, currency demand in the new EU member countries is expected to increase relative to the present group of euro countries – especially after gaining membership in the EMU because of integration of the financial markets and, in the longer term, catching-up growth. Hence, it is doubtful whether a large unintended redistribution of seigniorage to the benefit of acceding EMU countries will materialize in the future. |
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Source Link | Link to Main Source http://onlinelibrary.wiley.com/ |
Subject Categories | Economic and Financial Affairs |
Countries / Regions | Europe |