The collection and allocation of seigniorage revenues in China.
Item
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Title
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The collection and allocation of seigniorage revenues in China.
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Identifier
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AAI3187363
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identifier
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3187363
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Creator
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Peng, Shengpen.
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Contributor
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Adviser: Thom Thurston
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Date
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2005
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Language
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English
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Publisher
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City University of New York.
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Subject
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Economics, General
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Abstract
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This dissertation explores the seigniorage problem (source and distribution) in China. The main conclusion is that in China seigniorage resulted from the rapid increase in the monetary base since economic reform of the 1980s.;When currency in circulation (M0) is adopted as monetary base, monetary approach shows that on average seigniorage revenue is about 2.5 percent of GDP in China and opportunity cost approach shows that on average seigniorage revenue is merely 1.14 percent of GDP in China.;When broad money is adopted as monetary base, monetary approach shows that on average seigniorage revenue is 6.08 percent of GDP in China and opportunity cost approach shows that on average seigniorage revenue is 2.72 percent of GDP, these numbers are bigger than other countries.;In terms of the division of seigniorage revenue, seigniorage revenue has served as policy loans transferred from state banks to state owned enterprises, its main purpose is to subsidize those state-owned loss-making enterprises indirectly as well as to subsidize agriculture products. Foreign exchange reserves are used to support those state owned enterprises as well. Seigniorage revenue is also increasingly used to invest in (domestic and foreign) financial assets.;The empirical estimation of the money demand function shows that demand for real money balance is sensitive to the interest rate and inflation rate. However the degree of sensitivity is small enough to afford China substantial flows of seigniorage at low or moderate inflation rates. The elasticity of real money balance with respect to income is greater than one in China; also the average rate of growth has been high. The resulting high demand for money provides an ideal environment for the government to collect seigniorage revenue.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
