Article
Version 1
Preserved in Portico This version is not peer-reviewed
Commercial Bank Money, Seigniorage, and the Macroeconomy
Version 1
: Received: 25 August 2018 / Approved: 29 August 2018 / Online: 29 August 2018 (16:02:56 CEST)
How to cite: Bossone, B. Commercial Bank Money, Seigniorage, and the Macroeconomy. Preprints 2018, 2018080506. https://doi.org/10.20944/preprints201808.0506.v1 Bossone, B. Commercial Bank Money, Seigniorage, and the Macroeconomy. Preprints 2018, 2018080506. https://doi.org/10.20944/preprints201808.0506.v1
Abstract
This article evaluates the macroeconomic implications of commercial bank seigniorage, which emerges from the commercial banks’ power to create money in a fractional reserves regime. After evaluating the impact on aggregate output of commercial bank money relative to alternative exchange arrangements, the article identifies the determinants of commercial bank seigniorage and analyzes how equilibrium prices are determined in an economy where commercial banks extract seigniorage. The article also identifies the conditions under which commercial banks extract seigniorage, clarifies the relationship between seigniorage from commercial bank money creation and profits from pure financial intermediation, and shows how commercial bank seigniorage changes with different types of interbank payments settlement.
Keywords
Commercial banks, Interest rate, Money creation, Monetary circuit of production, Resource distribution, Seigniorage
Subject
Business, Economics and Management, Economics
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Comments (0)
We encourage comments and feedback from a broad range of readers. See criteria for comments and our Diversity statement.
Leave a public commentSend a private comment to the author(s)
* All users must log in before leaving a comment
