The political economy of seigniorage☆

determinants of cross-country and cross-time differ- satisfactorily confronted by the economics profession for four reasons. First, several political and institutional Journal of Development Economics 87 (2008) 29–50 www.elsevier.com/locate/econbase tially funded by FEDER). ⁎ Corresponding author. Universidade do Minho, Escola de by investing the resources obtained through the past issuance of base money). This distinction is useful to study central bank operations and monetary policy effectiveness. For the purposes of this paper,Economia e Gestão, P-4710-057 Braga, Portugal. Tel.: +351variables used as explanatory variables in earlier studies were relatively poorer measures of political instability and of the institutional environment than those available in new datasets such as the Cross National Time Series ☆ The authors acknowledge the helpful comments from Christopher Bowdler, Juan Jauregui, Delfim Neto, Carlos Végh, Robert Flood, Paolo Mauro, various staff members from the International Monetary Fund, two anonymous referees, and the editor, Lant Pritchett. We also thank Reid Click for sharing his data on creditworthiness ratings. The views expressed in this paper are those of the authors and do not necessarily represent those of the IMF or IMF policy. Francisco Veig