Monthly Briefing on the World Economic Situation and Prospects, No. 43

• Quantitative easing by developed countries imposing a tax on the rest of the world
• IMF resources boosted by $430 billion
• Unemployment continues to rise in Europe

Central banks of developed countries collected an enormous amount of seigniorage through ?quantitative easing? (QE) in two parts?over the last three years. The first part of seigniorage comes from the increases in the monetary base of these central banks through?appropriating the equivalent amount of sources from those who are holding the money. The seigniorage earned in this part over?the past three years is estimated at about $3 trillion (or 8 per cent of GDP of developed countries). In the three years prior to 2008,?monetary authorities of developed countries only earned a cumulative 1 per cent of GDP in seigniorage. As much of the additional?liquidity was created by reserve currency countries (the United States, Europe, and Japan), other countries, especially developing?countries, holding substantial reserves in the form of dollars, euros and yen, have paid for an important part of the seigniorage.?Foreign exchange reserves of the developing countries rose from $4.2 trillion before 2008 to $6.8 trillion in 2011.?

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