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Central Bank Profit Distribution As A Monetary Policy Tool

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  • Hiermeyer, Martin

Abstract

Next to conventional and unconventional monetary policy, there may be another form of monetary policy: Central bank profit distribution to the government. By distributing a higher profit than normal if inflation is below target, and a lower profit than normal if inflation is above target, central bankers may achieve their inflation target better. To guard against excessive inflation, lawmakers might stipulate that central bankers can only distribute higher profits than nor-mal if conventional monetary policy is exhausted (0% policy rate).

Suggested Citation

  • Hiermeyer, Martin, 2020. "Central Bank Profit Distribution As A Monetary Policy Tool," MPRA Paper 99864, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:99864
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    File URL: https://mpra.ub.uni-muenchen.de/99864/1/MPRA_paper_99864.pdf
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    References listed on IDEAS

    as
    1. Studener, Werner & Merriman, Niall & Karakitsos, Polychronis & Bunea, Daniela, 2016. "Profit distribution and loss coverage rules for central banks," Occasional Paper Series 169, European Central Bank.
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    More about this item

    Keywords

    Monetary Policy; Central Banks and Their Policies;

    JEL classification:

    • 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

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