Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/336484 
Year of Publication: 
2025
Series/Report no.: 
Sveriges Riksbank Working Paper Series No. 457
Publisher: 
Sveriges Riksbank, Stockholm
Abstract: 
Are central bank losses inflationary? We address this question at two levels. First, we revisit the theory and show that central bank losses constrain the conduct of monetary policy and are indeed inflationary provided the central bank is (a) not automatically recapitalized by the government and (b) concerned about its net worth. Second, we collect 350 years of data on the world's oldest central bank, the Sveriges Riksbank. We construct a time series for its return on assets and a narrative measure of profitability shocks. We find that inflation increases strongly and persistently in response to exogenous declines in central bank profits.
Subjects: 
Inflation
Central Banks
Central Bank Profitability
Central Bank Losses
Sveriges Riksbank
JEL: 
E52
E58
N13
N14
Document Type: 
Working Paper

Files in This Item:
File
Size





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