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Equilibrium contracts for the central bank of a monetary union
Dixit, Avinash K.; Jensen, Henrik - 2000
We consider the political economy of a monetary union wheremember governments attempt to influence the policy of the commoncentral bank. Modeling this as a common agency with incentivecontracts, we show that if incentives are all that matters for the bank,the equilibrium implements a weighted...
Persistent link: https://www.econbiz.de/10011397656
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Monetary Policy Coordination and the Role of Central Banks
Mohan, Rakesh - 2014
The unconventional monetary policies (UMPs) pursued by the advanced economies (AEs) have posed macroeconomic challenges for the emerging market economies (EMEs) through volatile capital flows and exchange rates. AE central banks need to acknowledge and appreciate the spillovers resulting from...
Persistent link: https://www.econbiz.de/10013053044
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Legal Aspects of Central Bank Digital Currency : Central Bank and Monetary Law Considerations
Bossu, Wouter; Itatani, Masaru; Margulis, Catalina; … - 2021
This paper analyzes the legal foundations of central bank digital currency (CBDC) under central bank and monetary law. Absent strong legal foundations, the issuance of CBDC poses legal, financial and reputational risks for central banks. While the appropriate design of the legal framework will...
Persistent link: https://www.econbiz.de/10013252024
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Optimal conservatism and collective monetary policymaking under uncertainty
Hefeker, Carsten; Zimmer, Blandine - 2014
We study how the optimal degree of conservatism relates to decision-making procedures in a Monetary Policy Committee … (MPC). In our framework, central bank conservatism is required to attenuate the volatility of monetary decisions generated … by the presence of uncertainty about the committee member' output objective. We show how this need for conservatism …
Persistent link: https://www.econbiz.de/10010391838
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Connected lending of last resort
Mitchener, Kris; Monnet, Eric - 2023
Because of secrecy, little is known about the political economy of central bank lending. Utilizing a novel, hand-collected historical daily dataset on loans to commercial banks, we analyze how personal connections matter for lending of last resort, highlighting the importance of governance for...
Persistent link: https://www.econbiz.de/10013494187
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The role of political institutions for the effectiveness of central bank independence
Hielscher, Kai; Markwardt, Gunther - 2011
This paper empirically studies the impact of the quality of political institutions on the link between central bank independence and inflation. Making use of data on the evolution of central bank independence over time and controlling for possible nonlinearities, we employ interaction models to...
Persistent link: https://www.econbiz.de/10009012047
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The enlargement of the European Union and the redistribution of seigniorage wealth
Feist, Holger - 2001
In the course of the EU enlargement process, the participation of accession countries in the European Monetary Union might lead to a significant redistribution of seigniorage wealth if current regulations prevail. In general, accession countries will be winners from this redistribution, for...
Persistent link: https://www.econbiz.de/10011397787
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The Euro Area's common pool problem revisited : has the Single Supervisory Mechanism ameliorated forbearance and evergreening?
Steinkamp, Sven; Tornell, Aaron; Westermann, Frank - 2017 - Last revision: October 6, 2017
The Single Supervisory Mechanism was introduced to eliminate the common-pool problem and limit uncontrolled lending by national central banks (NCBs). We analyze its effectiveness. Second, we model how, by forbearing and providing refinancing credit, NCBs avoid domestic resolution costs and,...
Persistent link: https://www.econbiz.de/10011723498
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ECB Euro Liquidity Lines
Albrizio, Silvia; Kataryniuk, Iván; Molina, Luis; … - 2023
Central bank liquidity lines have gained momentum since the global financial crisis as a crosscurrency liquidity management tool. We provide a complete timeline of the ECB liquidity line announcements and study their signalling and spillback effects. The announcement of an ECB euro liquidity...
Persistent link: https://www.econbiz.de/10014354526
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Causal effects of countercyclical interest rates : evidence from the classical gold standard
Mitchener, Kris; Pina, Gonçalo - 2022
We estimate the causal impact of countercyclical interest rates on macroeconomic outcomes in open economies. To identify countercyclical interest rates, we construct a new database of short-term interest rates, principal exports, and international commodity prices for 40 economies from 1870 to...
Persistent link: https://www.econbiz.de/10013183777