Berument, HakanÖnder, A. Ö.2019-02-132019-02-1320020965-7576http://hdl.handle.net/11693/49491This paper extends the government optimum expenditure financing model by incorporating the effects of both the government's political orientation and the central bank's independence. For the panel data of fourteen OECD countries for the period from 1974 to 1997, this paper shows first that countries with higher levels of central bank independence generate less seigniorage revenue, and second that governments which are controlled by left-wing parties create more seigniorage revenue to finance their spending.EnglishGovernment optimum expenditure financing modelCentral bank independencePartisan theoryArticle1467-9396