哈佛大学宏观经济学课后习题答案.pdf

C H A P T E R 4 MMoonneeyy aanndd IInnffllaattiioonn 4. The major benefit of having a national money is seigniorage—the ability of the govern- ment to raise revenue by printing money. The major cost is the possibility of inflation, or even hyperinflation, if the government relies too heavily on seigniorage. The benefits and costs of using a foreign money are exactly the reverse: the benefit of foreign money is that inflation is no longer under domestic political control, but the cost is that the domestic government loses its ability to raise revenue through seigniorage. (There is also a subjective cost to having pictures of foreign leaders on your currency.) The foreign country’s political stability is a key factor. The primary reason for using another nation’s money is to gain stability. If the foreign country is unstable, then the home country is definitely better off using its own currency—the home econo- my remains more stable, and it keeps the seigniorage. 5. A paper weapon might have been effective for all the reasons that a hyperinflation is bad. For example, it increases shoeleather and menu costs; it makes relative prices more variable; it alters tax liabilities in arbitrary ways; it increases variability in rela- 26 Answers to Textbook Questions and Problems tive prices; it makes the unit of account less useful; and finally, it increases uncertainty and causes arbitrary redistributions of wealth. If the hyperinflation is sufficiently extreme, it can undermine the public’s confidence in the economy and economic policy. Note that if foreign airplanes dropped the money, then the government would not receive seigniorage revenue from the resulting inflation, so this benefit usually associ- ated with inflation is lost. MMoorree PPrroobblleemmss aanndd AApppplliiccaattiioonnss ttoo CChhaapptteerr 44 1.