The political economy of central bank’s quasi-fiscal operations implemented for 2012-2016 in Mongolia

Gan-Ochir Doojav ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper reviews issues associated with quasi-fiscal operations of the Bank of Mongolia (BOM) implemented during the period 2012-2016 in context of political economy. Under the quasi-fiscal operations, the BOM injected about MNT 7 trillion (which is equivalent to 40 percent of GDP) into the economy over the period 2012-2016. The politically driven quasi-fiscal operations to buffer the economy from external shocks supported growth for a while, but at the cost of increasing economic vulnerabilities. Several lessons are learned from the quasi-fiscal operations. The case study of Mongolia supports the view that politics leads to the economic fluctuations not only through fiscal policy, but also through monetary policy in developing countries.

Keywords: Central bank independence; Political pressure; Quasi-fiscal operations; Monetary policy; Mongolia (search for similar items in EconPapers)
JEL-codes: E20 E52 E58 P48 (search for similar items in EconPapers)
Date: 2018-05, Revised 2018-05
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:109850

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