Most macroeconomic models treat the central bank and the trea-sury as a unified entity. The balance sheet of the … central bank is therefore implicitly treated as an accounting fiction. While this is often realistic, the central bank balance … sheet has implications for central bank independence. There are wide differences in the nature of central bank balance …

We show that, when a central bank is not fully financially backed by the treasury and faces a solvency constraint, an … operations by the central bank that involve purchases of long-term bonds can help mitigate deflation and recession under a … discretionary policy equilibrium. This change in central bank balance sheet, which increases its size and duration, provides an …

This paper presents a small open economy model to analyze the role of central bank liquidity management in implementing … that the central bank uses to manage liquidity in the economy, which creates a role for the central bank balance sheet in … list of eligible collaterals accepted at the liquidity facilities operated by the central bank. These policies have been …