Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/167532
Authors: 
Goncharov, Igor
Ioannidou, Vasso
Schmalz, Martin C.
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6546
Abstract: 
We document that central banks are significantly more likely to report slightly positive profits than slightly negative profits. The discontinuity in the profit distribution is (i) more pronounced amid greater political or public pressure, the public’s receptiveness to more extreme political views, and agency frictions arising from governor career concerns, but absent when no such factors are present, and (ii) correlated with more lenient monetary policy inputs and greater inflation. These findings indicate that profitability concerns, while absent from standard theoretical models of central banking, are both present and effective in practice, and inform a theoretical debate about monetary stability and the effectiveness and riskiness of non-traditional central banking.
Subjects: 
central banks
profitability
non-traditional central banking
monetary stability
JEL: 
E58
Document Type: 
Working Paper
Social Media Mentions:

11



Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.