The Generation and Distribution of Central Bank Seigniorage in the Czech Republic, Hungary and Poland

Abstract

We measure the amount of central bank seigniorage generated in three economies in transition, and inquire to what extent seigniorage ultimately accrues to the government. We relate our findings to the institutional environment of the three countries. In particular we document that, in parallel to the process of disinflation, seigniorage has declined in the period 1992-1997 in both Hungary and Poland. On the other hand it slightly increased in the Czech Republic, even if this country has experienced a steeper path of disinflation. Only in Hungary seigniorage benefits the government in a significant amount.