Central bank independence and financing government spending

Central Bank Independence and Financing Government Spending*

Central Bank Independence and Central Bank Conservatism: Theory with an Application to Iran

New monetary literatures widely concentrates on the importance of institutional arrangements in the effectiveness of monetary policy. The debate regarding the optimal institutional design of central banks, independence and conservatism are usually considered to be the most important ingredients for a stable and successful monetary policy. Therefore, the purpose of this study is to deal with the...

Central Bank Independence and Macro- prudential Regulation

We consider the optimality of various institutional arrangements for agencies that conduct macro-prudential regulation and monetary policy. When a central bank is in charge of price and financial stability, a new time inconsistency problem may arise. Ex-ante, the central bank chooses the socially optimal level of inflation. Ex-post, however, the central bank chooses inflation above the social o...

Debt, inflation and central bank independence

Increasing the independence of a central bank from political influence, although ex-ante socially beneficial and initially successful in reducing inflation, would ultimately fail to lower inflation permanently. The smaller anticipated policy distortions implemented by a more independent central bank would induce the fiscal authority to decrease current distortions by increasing the deficit. Ove...

Comparative analysis of financing the government budget deficit through Islamic treasury bills and borrowing from the central bank

The budget deficit refers to the situation where the government’s expenditures exceeding its revenues According to many schools of economics, the existence of a persistent budget deficit in an economy is a sign of that country’s economic weakness, and the government of that country must implement economic reforms to eliminate or reduce it in various ways. There are various ways to finance the b...