Working Paper: CEPR ID: DP1747
Authors: Hanswerner Sinn; Holger Feist
Abstract: The European Monetary Union will involve socialization of existing seigniorage wealth of national central banks. This socialization will create windfall gains for countries with relatively low monetary bases such as France and the United Kingdom and will be disadvantageous for countries like Germany, Spain, the Netherlands and Austria, who will suffer per capita wealth losses of between ECU 406 and ECU 182. The paper quantifies the gains and losses in seigniorage wealth under alternative membership and bank regulation scenarios.
Keywords: central banks; european integration; european monetary union; seigniorage
JEL Codes: E58; F33; F42
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Equity share in ECB (G12) | Gain seigniorage wealth (E49) |
| Introduction of the Euro (F36) | Redistribution of seigniorage wealth among EMU member countries (F36) |
| Lower monetary bases (E49) | Windfall gains in seigniorage wealth (H19) |
| Higher monetary bases (E50) | Losses in seigniorage wealth (E49) |
| Harmonizing reserve requirements (E52) | Mitigate redistributive effects (H23) |