uses and sources of seigniorage

automatic stabilizers

pro-cyclical fiscal policy instruments

debt stabilization

was expansionary as can be seen from the increase in the cyclically adjusted government budget deficit

was contractionary as can be seen from the increase in the government budget surplus

increases the actual budget deficit by an amount equal to the distance AB

matters only for the composition of GDP between private and public uses and not for the level of GDP

(A) existing debt; (B) interest payment

(A) seigniorage; (B) existing debt

(A) government bonds held by foreigners; (B) interest payment

(A) seigniorage; (B) interest payment

GDP in the denominator of the ratio will fall too

.he clearly confused seigniorage with the inflation tax which is why his recommended policy would fail

.this might help to stabilize the debt/GDP ratio but it definitely will give you inflation that is exploding

.this is equivalent to defaulting on the sovereign debt which only postpones the debt to a later period

25% = (1-3/4) times 100

57% = 100 / (1+ 3/4)

75% = (3/4) times 100

133% = (4/3) times 100