Definition

A fee or profit that a government earns from issuing currency, especially the difference between the value of money and the cost to produce it.

Example

The government benefits from seignorage when it prints more money than it costs to produce.

Conversation

Have you ever heard of the term seignorage?

Yeah, I think it relates to the profit made by issuing money.

Exactly! It's interesting how it affects the economy.

For sure, it’s a fascinating concept to learn about.

Synonyms & Antonyms

Root Explanation

Seignorage comes from the Old French word 'seigneurage', which is derived from 'seigneur' (meaning lord or master) and the suffix '-age' (indicating a state or condition). The term originally referred to the right of a lord to mint coins and the profit made from the difference between the value of the coin and the cost of the metal used to produce it. Thus, seignorage refers to the profit or fee taken by a sovereign for minting currency.

Memory Tip

Think of a 'lord' ('seigneur') who has the 'right' to mint coins, and the '-age' indicates the condition of that right. This helps you remember that seignorage is the profit from minting currency.

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