E-mail alert  |  Contact  
Search:       Go  
Background  |   Sponsoring institutions  |   Editorial board   |   Advisory board   |   Associate editors
Call for papers  |   Submission guidelines  |   Editorial process
Current issue  |   Past issues  |  
March 2015 issue
List of authors
 
Bauer
Claussen, Røisland
Duprey
Tetlow
Riggi, Santoro
Park
Carpenter, Ihrig, Klee, Quinn, Boote
Kilponen, Laakkonen, Vilmunen
IJCB Home   Read the journal   Past issue
Past issues
2017
 
December
September
June
March
February
2016
 
December
September
June
March
2015
 
December
September
June
March
January
2014
 
December
September
June
March
2013
 
December
September
June
March
January
2012
 
December
September
June
March
January
2011
 
December
September
June
March
2010
 
December
September
June
March
2009
 
December
September
June
March
2008
 
December
September
June
March
2007
 
December
September
June
March
2006
 
December
September
June
March
2005
 
December
September
May

Central Banks' Quasi-Fiscal Policies and Inflatione

by Seok Gil Parka

Abstract

Although central banks recently expanded their balance sheets by unconventional policy actions, little theory is available to explain how and when central banks’ balance sheets affect inflation and impose restrictions on monetary policy. A DSGE model predicts that central banks’ balance sheet shocks affect inflation through private agents’ portfolio adjustments when fiscal authorities do not financially support central banks. In those cases, central banks cannot successfully unwind inflated balance sheets and stabilize inflation during the implementation of exit strategy. Therefore, fiscal authorities’ backup is a pre-condition for effective monetary policy when central banks are engaged in quasi-fiscal policy roles.

JEL Codes: E31, E58, E63.

 
Full article (PDF, 38 pages, 409 kb)


a International Monetary Fund