Seigniorage: An argument for a national currency?

Seigniorage has often been cited as one of the most important and most readily quantifiable arguments for a government not to give up its monopoly in base money. The analysis in this paper however points to the contrary, that for many countries the success in exploiting seigniorage has in fact been limited. In their search for a viable monetary regime and in the face of further liberalisation of capital markets, Central and Eastern European countries are advised to consider euroisation as a way to achieve price stability without exchange rate volatility.