Seigniorage and the Inflation Tax in a Simple Steady State
This lesson is part of the course
In this lesson
You measure what a fictional state earned from issuing base money in one year, separate the inflation tax paid by money holders, then simulate a steady state in which money demand falls with inflation and chart the hump-shaped inflation-tax curve.
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Lessons in this course
- Counting Money: Currency, Deposits and the Aggregates M1 to M3 Locked
- Deposit Creation: Rounds, Leaks and the Money Multiplier Locked
- The Quantity Equation: MV = PY, Velocity and Implied Inflation Locked
- A Rule-Based Policy Rate: Inflation Gap, Output Gap and the Deviation Locked
- Policy Stance: Real Rates, the Neutral Rate and Tight vs Loose with IFS Locked
- The Central Bank Balance Sheet: Asset Purchases, Reserves and Bank Liquidity Locked
- Seigniorage and the Inflation Tax in a Simple Steady State Locked
- Inflation-Target Scorecard: 12-Month Inflation, the Band and the Chart Locked