Jump to ContentJump to Main Navigation
Show Summary Details
More options …

The B.E. Journal of Macroeconomics

Editor-in-Chief: Cavalcanti, Tiago / Kambourov, Gueorgui

Ed. by Abraham, Arpad / Carceles-Poveda , Eva / Debortoli, Davide / Lambertini, Luisa / Nimark, Kristoffer / Wang, Pengfei

2 Issues per year

IMPACT FACTOR 2017: 0.378
5-year IMPACT FACTOR: 0.462

CiteScore 2017: 0.62

SCImago Journal Rank (SJR) 2017: 0.553
Source Normalized Impact per Paper (SNIP) 2017: 0.605

See all formats and pricing
More options …

Monetary Policy and Central Bank Balance Sheet Concerns

Tiago C Berriel / Saroj Bhattarai
Published Online: 2009-01-27 | DOI: https://doi.org/10.2202/1935-1690.1770

We introduce a fiscally independent central bank with balance sheet concerns in the new Keynesian model. The central bank is subject to a budget constraint and state-contingent transfers from the treasury are not allowed. This change renders the standard optimal monetary policy solution non implementable. In addition to facing a budget constraint, when the central bank targets real capital, optimal monetary policy is substantially different from the standard case. In response to a cost-push shock, variation in inflation decreases at the cost of increased output gap variation; there is incomplete stabilization of aggregate demand and money demand shocks; response to a cost-push shock under discretion is similar to that under commitment in the standard model; and the central bank tracks real money balances.

Keywords: monetary policy; inflation targeting; central bank independence; central bank capital; central bank balance sheet

About the article

Published Online: 2009-01-27

Citation Information: The B.E. Journal of Macroeconomics, Volume 9, Issue 1, ISSN (Online) 1935-1690, DOI: https://doi.org/10.2202/1935-1690.1770.

Export Citation

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston.Get Permission

Citing Articles

Here you can find all Crossref-listed publications in which this article is cited. If you would like to receive automatic email messages as soon as this article is cited in other publications, simply activate the “Citation Alert” on the top of this page.

L. Dalla Pellegrina, D. Masciandaro, and R.V. Pansini
Journal of Financial Stability, 2013, Volume 9, Number 3, Page 415
Andrew Swiston, Florencia Frantischek, Przemek Gajdeczka, and Alexander Herman
IMF Working Papers, 2014, Volume 14, Number 87, Page 1

Comments (0)

Please log in or register to comment.
Log in