A Macro-economic Consequence of the Central Bank's Reserve Fund: A Political-economic Perspective
Academic attention to the central bank's retained profits has been scarce, although their magnitudes are nontrivial. This paper confirms that the profits retained as a reserve fund, if combined with unconstrained bureaucratic discretion, can engender inflationary bias. This result is intriguing because the previous literature emphasizes a similar distortion in monetary policy for the opposite case where those profits are turned over to the Treasury. We therefore propose that some external changes in central-banking institutions alone may not warrant their desired 'outcome' without reining in excessive discretion. This proposition can provide a beneficial implication for establishing the meaningful independence of central banks.
Volume (Year): 52 (2011)
Issue (Month): 2 (December)
|Contact details of provider:|| Phone: +81-42-580-8000|
Web page: http://www.econ.hit-u.ac.jp/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:hit:hitjec:v:52:y:2011:i:2:p:143-163. 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: (Digital Resources Section, Hitotsubashi University Library)
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.