Peter Sands, 19 February 2016

A move is afoot to eliminate high denomination bills such as the €500 note. This column argues that the elimination would not, on its own, stem the flow of funds to support terrorism, but it is a necessary step on the road to restricting terrorist finance. While there are counter-arguments, they tend to argue for activities that involve breaking the law – in one way or another. 

Paul De Grauwe, Yuemei Ji, 14 June 2013

The monetary-fiscal policy connection is under scrutiny by the German Constitutional Court in the context of the ECB’s OMT bond-buying programme. This column argues that most analyses are deeply flawed by the misapplication of private-company default principles to the central bank. ECB bond-buying transforms public bonds into monetary base, and sovereign-default risk into inflation risk. The real question is: What is the non-inflationary limit to money-base expansion? This depends upon the economic situation and is much higher in the current liquidity-trap setting.

Hans-Werner Sinn, 22 June 2007

Seigniorage is generated when a central bank creates money and gives it to the private sector in exchange for interest-bearing assets. Under the Maastricht Treaty, the interest earnings are distributed according to country size, but given the dominant role of the DM before the euro, this allocation rule cost Germany about €30 billion.


CEPR Policy Research