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Central Bank Balance Sheets: Expansion and Reduction since 1900

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  • Ferguson, Niall
  • Schaab, Andreas
  • Schularick, Moritz

Abstract

In this paper we study the evolution of central banks’ balance sheets in 12 advanced economies since 1900. We present a new dataset assembled from a wide array of historical sources. We find that balance sheet size in most developed countries has fluctuated within rather clearly defined bands relative to output. Historically, clusters of big expansions and contractions of balance sheets have been associated with periods of geopolitical or financial crisis. This explains the co-movement between the size of central bank balance sheets and public debt levels in the past century. Relative to the size of the financial sector, moreover, central bank balance sheets had shrunk dramatically in the three decades preceding the global financial crisis. By that yardstick, their recent expansion partly marks a return to earlier levels. Some of the recent increase could therefore prove to be permanent if the financial sector maintains permanently higher liquidity ratios.

Suggested Citation

  • Ferguson, Niall & Schaab, Andreas & Schularick, Moritz, 2015. "Central Bank Balance Sheets: Expansion and Reduction since 1900," CEPR Discussion Papers 10635, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:10635
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    Cited by:

    1. Anne-Marie Rieu-Foucault, 2018. "Les interventions de crise de la FED et de la BCE diffèrent-elles ?," EconomiX Working Papers 2018-31, University of Paris Nanterre, EconomiX.
    2. repec:taf:rripxx:v:23:y:2016:i:6:p:1064-1092 is not listed on IDEAS
    3. Constantin ANGHELACHE & Madalina Gabriela ANGHEL & Marius POPOVICI, 2016. "Financial-monetary analysis model," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 64(7), pages 19-23, July.

    More about this item

    Keywords

    balance sheets; central banks; financial sector; monetary policy; public debt;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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