Advanced Search
MyIDEAS: Login

Central Banks Quasi-Fiscal Policies and Inflation

Contents:

Author Info

  • Seok Gil Park
Registered author(s):

    Abstract

    Although central banks have recently taken unconventional policy actions to try to shore up macroeconomic and financial stability, little theory is available to assess the consequences of such measures. This paper offers a theoretical model with which such policies can be analyzed. In particular, the paper shows that in the absence of the fiscal authorities'' full backing of the central bank''s balance sheet, strange things can happen. For instance, an exit from quantitative easing could be inflationary and central banks cannot successfully unwind inflated balance sheets. Therefore, the fiscal authorities'' full backing of the monetary authorities'' quasi-fiscal operations is a pre-condition for effective monetary policy.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=25623
    Download Restriction: no

    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 12/14.

    as in new window
    Length: 35
    Date of creation: 01 Jan 2012
    Date of revision:
    Handle: RePEc:imf:imfwpa:12/14

    Contact details of provider:
    Postal: International Monetary Fund, Washington, DC USA
    Phone: (202) 623-7000
    Fax: (202) 623-4661
    Email:
    Web page: http://www.imf.org/external/pubind.htm
    More information through EDIRC

    Order Information:
    Web: http://www.imf.org/external/pubs/pubs/ord_info.htm

    Related research

    Keywords: Central bank policy; Economic models; central bank; inflation; fiscal authority; fiscal policy; monetary policy; fiscal authorities; money balance; budget constraint; fiscal surplus; budget constraints; fiscal policies; fiscal theory; money market; monetary fund; fiscal policy rule; fiscal operations; fiscal shocks; monetary economics; monetary liability; aggregate demand; fiscal policy instrument; tax cut; fiscal support; money supply; contractionary monetary policy; fiscal affairs department; money demand; quasi-fiscal activity; fiscal affairs; fiscal activity; government budget constraint; monetary policy rule; tax change; fiscal activities; tax burden; government budget; fiscal supports; government spending; fiscal need; optimal monetary policy; open market operations; quasi-fiscal activities; monetary authorities; fiscal shock; fiscal agent; fiscal crises;

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. G. A. Mackenzie & Peter Stella, 1996. "Quasi-Fiscal Operations of Public Financial Institutions," IMF Occasional Papers 142, International Monetary Fund.
    2. Leeper, Eric M., 1991. "Equilibria under 'active' and 'passive' monetary and fiscal policies," Journal of Monetary Economics, Elsevier, vol. 27(1), pages 129-147, February.
    3. Troy Davig & Eric M. Leeper & Hess Chung, 2004. "Monetary and Fiscal Policy Switching," NBER Working Papers 10362, National Bureau of Economic Research, Inc.
    4. Charles Goodhart, 1988. "The Evolution of Central Banks," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262570734, December.
    5. Berriel Tiago C & Bhattarai Saroj, 2009. "Monetary Policy and Central Bank Balance Sheet Concerns," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-33, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:12/14. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.