Central Bank Profit Distribution As A Monetary Policy Tool

Martin Hiermeyer

MPRA Paper from University Library of Munich, Germany

Abstract: Next to conventional and unconventional monetary policy, there may be another form of monetary policy: Central bank profit distribution to the government. By distributing a higher profit than normal if inflation is below target, and a lower profit than normal if inflation is above target, central bankers may achieve their inflation target better. To guard against excessive inflation, lawmakers might stipulate that central bankers can only distribute higher profits than nor-mal if conventional monetary policy is exhausted (0% policy rate).

Keywords: Monetary Policy; Central Banks and Their Policies (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 2020-04-25
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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