The Seigniorage Curse

“The Seigniorage Curse appears to hollow out the economy by the following manner: First, the premium charged to holders of dollars becomes a new source of accrued, aggregate revenue. This extra capital flowing into the economy is initially seen as a global honoring of our economyโ€™s strength, and innovation. But when innovation falters and less…

“The Seigniorage Curse appears to hollow out the economy by the following manner: First, the premium charged to holders of dollars becomes a new source of accrued, aggregate revenue. This extra capital flowing into the economy is initially seen as a global honoring of our economyโ€™s strength, and innovation. But when innovation falters and less value is created, seigniorage is maintainedโ€“and thus the unhealthy dynamic begins. From this point forward, whether the US economy either leads in innovation, or lags in innovation, the Dollar advantage grows regardless.” Read more.

Gregor Macdonaldย 
Gregor.us blog, March 24, 2009.


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