Macroeconomy, Monetary Policy and Central Bank Capitalization
This paper offers stochastic projections of the Central Bank of Chile’s balance sheet (stocks and flows), grounded on its present deficit situation. These projections incorporate the effect on the balance sheet of some macroeconomic variables and alternative policies, taking into consideration the economy’s inherent uncertainty and risks. It also describes and evaluates the main causes of the current deficit. In the baseline scenario, our deterministic projections show that the Central Bank’s capital will tend to grow and reach positive figures after twenty-five years. However, statistical projections indicate that this capital will continue in the red twenty-five years into the future with a 69% probability. On the other hand, a capital contribution of 7% of GDP would be necessary for senior liabilities not to surpass assets in ten years’ time, with a 95% probability. The likely evolution of capital is more favorable in the long run if the reserve hoarding growth rate is moderated, if minimum capital is established in real terms instead of nominal terms, and if accrued, unrealized, foreign exchange gains are not distributed.
Volume (Year): 12 (2009)
Issue (Month): 1 (April)
|Contact details of provider:|| Postal: |
Phone: (562) 670 2000
Fax: (562) 698 4847
Web page: http://www.bcentral.cl/
More information through EDIRC
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.:
- Robert E. Lucas, Jr., 2000. "Inflation and Welfare," Econometrica, Econometric Society, vol. 68(2), pages 247-274, March.
- Peter Stella & Ulrich H. Klueh, 2008. "Central Bank Financial Strength and Policy Performance; An Econometric Evaluation," IMF Working Papers 08/176, International Monetary Fund.
- Alain Ize, 2005.
"Capitalizing Central Banks; A Net Worth Approach,"
IMF Working Papers
05/15, International Monetary Fund.
- Alain Ize, 2007.
"Spending Seigniorage: Do Central Banks Have a Governance Problem?,"
IMF Staff Papers,
Palgrave Macmillan, vol. 54(3), pages 563-589, July.
- Alain Ize, 2006. "Spending Seigniorage; Do Central Banks Have a Governance Problem?," IMF Working Papers 06/58, International Monetary Fund.
- Peter Stella, 1997. "Do Central Banks Need Capital?," IMF Working Papers 97/83, International Monetary Fund.
- Cysne, Rubens Penha & Maldonado, Wilfredo L. & Monteiro, Paulo Klinger, 2004.
"Inflation and Income Inequality: A Shopping-Time Aproach,"
Economics Working Papers (Ensaios Economicos da EPGE)
566, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- Cysne, Rubens P. & Maldonado, Wilfredo L. & Monteiro, Paulo Klinger, 2005. "Inflation and income inequality: A shopping-time approach," Journal of Development Economics, Elsevier, vol. 78(2), pages 516-528, December.
- Jose De Gregorio & Federico Sturzenegger, 1994. "Credit Markets and the Welfare Costs of Inflation," NBER Working Papers 4873, National Bureau of Economic Research, Inc.
- Peter Stella, 2005. "Central Bank Financial Strength, Transparency, and Policy Credibility," IMF Staff Papers, Palgrave Macmillan, vol. 52(2), pages 335-365, September.
When requesting a correction, please mention this item's handle: RePEc:chb:bcchec:v:12:y:2009:i:1:p:5-38. 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: (Claudio Sepulveda)
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.