Does Central Bank Financial Strength Matter for Inflation? An Empirical Analysis
This paper analyses empirically the link between central bank financial strength and inflation. The issue has become very topical in recent years as many central banks have accumulated large financial exposures and the risk of losses has risen. We conclude that even though some estimates show a statistically significant and potentially non-linear negative relationship between several measures of central bank financial strength and inflation, this link appears rather weak and not as robust as suggested by the previous - very limited - literature. In general, other inflation determinants play a much more important and robust role.
|Date of creation:||May 2012|
|Date of revision:|
|Contact details of provider:|| Postal: Na Prikope 28, 115 03 Prague 1|
Phone: 00420 2 2442 1111
Fax: 00420 2 2421 8522
Web page: http://www.cnb.cz/en/research/research_intro/
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.:
- Luis CatÃ£o & Marco Terrones, 2003.
"Fiscal Deficits and Inflation,"
IMF Working Papers
03/65, International Monetary Fund.
- de Carvalho Filho Irineu E, 2011.
"28 Months Later: How Inflation Targeters Outperformed Their Peers in the Great Recession,"
The B.E. Journal of Macroeconomics,
De Gruyter, vol. 11(1), pages 1-46, July.
- de Carvalho Filho, Irineu, 2011. "28 Months Later: How Inflation Targeters Outperformed Their Peers in the Great Recession," MPRA Paper 29100, University Library of Munich, Germany.
- Crowe, Christopher & Meade, Ellen E., 2008.
"Central bank independence and transparency: Evolution and effectiveness,"
European Journal of Political Economy,
Elsevier, vol. 24(4), pages 763-777, December.
- Christopher W. Crowe & Ellen E. Meade, 2008. "Central Bank Independence and Transparency: Evolution and Effectiveness," IMF Working Papers 08/119, International Monetary Fund.
- Christopher Crowe & Ellen E. Meade, 2007. "Central Bank Independence and Transparency: Evolution and Effectiveness," Working Papers 2007-20, American University, Department of Economics.
- Martin Cincibuch & Tomáš Holub & Jaromír Hurník, 2009.
"Central Bank Losses and Economic Convergence,"
Czech Journal of Economics and Finance (Finance a uver),
Charles University Prague, Faculty of Social Sciences, vol. 59(3), pages 190-215, August.
- Ari Aisen & Francisco JosÃ© Veiga, 2005.
"Does Political Instability Lead to Higher Inflation? A Panel Data Analysis,"
IMF Working Papers
05/49, International Monetary Fund.
- Aisen, Ari & Veiga, Francisco Jose, 2006. "Does Political Instability Lead to Higher Inflation? A Panel Data Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(5), pages 1379-1389, August.
- Alfaro, Laura, 2005. "Inflation, openness, and exchange-rate regimes: The quest for short-term commitment," Journal of Development Economics, Elsevier, vol. 77(1), pages 229-249, June.
- Camilo Ernesto Tovar Mora & Pedro Castro & Gustavo Adler, 2012. "Does Central Bank Capital Matter for Monetary Policy?," IMF Working Papers 12/60, International Monetary Fund.
- Martin Cincibuch & David Vávra, 2001. "Value of Monetary Income in a Transition Economy," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 51(11), pages 574-590, November.
When requesting a correction, please mention this item's handle: RePEc:cnb:wpaper:2012/03. 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: (Jan Babecky)
If references are entirely missing, you can add them using this form.