Does Central Bank Capital Matter for Monetary Policy?

Gustavo Adler, Pedro Castro () and Camilo Tovar ()

Open Economies Review, 2016, vol. 27, issue 1, 183-205

Abstract: This paper examines empirically whether central bank capital influences the conduct of monetary policy. To this end, we estimate interest rate rules for a sample of 41 countries and employ linear and non-linear regression methods to test if a measure of central bank financial strength can explain deviations of actual interest rates from those predicted by the estimated interest rate (Taylor-like) rules. Our results suggest that central bank capital is indeed a relevant factor behind interest rate policy decisions. Copyright Springer Science+Business Media New York 2016

Keywords: Monetary policy; Central Bank Balance Sheets; Central bank capital; Emerging markets; International reserves; E43; E52; E58 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (13)

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Working Paper: Does Central Bank Capital Matter for Monetary Policy? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:openec:v:27:y:2016:i:1:p:183-205

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DOI: 10.1007/s11079-015-9360-1

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