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Theoretical and Applied Economics
No. 9 / 2006 (504)

Budgetary Policy and Seignorage

Liviu-Catalin Moraru
Academia de Studii Economice Bucuresti
Corina-Ionela Dumitrescu
Universitatea „Politehnica” Bucuresti

Abstract. At once with the development of money as medium of exchange, the feudal lords found out an easy way to obtain more monetary resources by monopolizing the coins’ mint. As result, they used to ask a certain percent from the gold quantity that people wanted to transform in coins (call brassage). Despite the fact that we are living modern times, this still happens. The governments didn’t give up to this important source of revenues; they only developed more sophisticated methods in order to increase their budget revenues. The aim of this paper (article) is to analyze these specific methods, to see how they work and to analyze the effects as well.

Keywords: seigniorage; brassage; tax inflation; economic models.

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