IDEAS home Printed from https://ideas.repec.org/a/pfq/journl/v59y2014i4p492-510.html
   My bibliography  Save this article

Central Bank Profitability and Budget Deficit

Author

Listed:
  • Novák, Zsuzsanna
  • Vámos, Imre

Abstract

This paper investigates central bank profitability primarily focusing on its impact on the government budget. It compares the accounting profit of the four euro area countries running the highest debt and three new EU Member States in the period 1999–2013 following the introduction of the euro. The analysis points out that despite autonomous monetary policy and higher seigniorage revenue, countries with higher levels of (external) government debt, such as Hungary, are often faced with central bank losses. The paper summarises and systematises the main findings of the 2013/I thematic issue of the Public Finance Quarterly titled “Monetary Policy” on the relationship between the National Bank of Hungary (MNB) and the budget. Furthermore, it delineates the European Union’s relevant recognition rules and evaluates the domestic processes in an international context by describing the profitability of the ECB and the selected European central banks.

Suggested Citation

  • Novák, Zsuzsanna & Vámos, Imre, 2014. "Central Bank Profitability and Budget Deficit," Public Finance Quarterly, Corvinus University of Budapest, vol. 59(4), pages 492-510.
    • Handle: RePEc:pfq:journl:v:59:y:2014:i:4:p:492-510
    as

    Download full text from publisher

    File URL: https://unipub.lib.uni-corvinus.hu/8862/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Carl E. Walsh, 2010. "Monetary Theory and Policy, Third Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262013770, December.
    2. Dedák, István, 2013. "Balance Sheet Recession and Debt Financing," Public Finance Quarterly, Corvinus University of Budapest, vol. 58(1), pages 76-94.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. KAMKOUM, Arnaud Cedric, 2023. "The Federal Reserve’s Response to the Global Financial Crisis and its Effects: An Interrupted Time-Series Analysis of the Impact of its Quantitative Easing Programs," Thesis Commons d7pvg, Center for Open Science.
    2. Greg W. Hunter & Craig Kerr, 2019. "Virtual Money Illusion and the Fundamental Value of Non-Fiat Anonymous Digital Payment Methods," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 25(2), pages 151-164, May.
    3. Franz Hamann & Fernando Arias-Rodríguez & Jesus Bejarano & Margarita Gafaro & Juan C. Mendez-Vizcaino & Andrea Paola Poveda-Olarte, 2019. "Productividad total de los factores y eficiencia en el uso de los recursos productivos en Colombia," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, issue 89, pages 1-54, February.
    4. Siddartha Chattopadhyay & Betty C. Daniel, 2018. "Taylor-Rule Exit Policies for the Zero Lower Bound," International Journal of Central Banking, International Journal of Central Banking, vol. 14(5), pages 1-53, December.
    5. Michael Woodford, 2013. "Macroeconomic Analysis Without the Rational Expectations Hypothesis," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 303-346, May.
    6. Francisco B. Galarza & Fernando Requejo, 2019. "Reducing Informality Using Two-Sided Incentives: Theory and Experiment," Working Papers 149, Peruvian Economic Association.
    7. Arteta,Carlos & Kose,Ayhan & Stocker,Marc & Taskin,Temel, 2016. "Negative interest rate policies : sources and implications," Policy Research Working Paper Series 7791, The World Bank.
    8. Taylor, J.B., 2016. "The Staying Power of Staggered Wage and Price Setting Models in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 2009-2042, Elsevier.
    9. Alba, Joseph D. & Chia, Wai-Mun & Park, Donghyun, 2012. "A Welfare Evaluation of East Asian Monetary Policy Regimes under Foreign Output Shock," ADB Economics Working Paper Series 299, Asian Development Bank.
    10. Gert Peersman, 2011. "Macroeconomic Effects of Unconventional Monetary Policy in the Euro Area," CESifo Working Paper Series 3589, CESifo.
    11. Marco Riguzzi & Philipp Wegmueller, 2017. "Economic Openness and Fiscal Multipliers," International Economic Journal, Taylor & Francis Journals, vol. 31(1), pages 1-35, January.
    12. Donal Smith, 2015. "Collateral Constraints and the Interest Rate," Discussion Papers 15/22, Department of Economics, University of York.
    13. Bhavesh Salunkhe & Anuradha Patnaik, 2018. "The IS Curve and Monetary Policy Transmission in India: A New Keynesian Perspective," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 12(1), pages 41-66, February.
    14. Accolley, Delali, 2018. "Accounting for Busines Cycles in Canada: II. The Role of Money," MPRA Paper 85481, University Library of Munich, Germany.
    15. Caggiano, Giovanni & Castelnuovo, Efrem & Damette, Olivier & Parent, Antoine & Pellegrino, Giovanni, 2017. "Liquidity traps and large-scale financial crises," Journal of Economic Dynamics and Control, Elsevier, vol. 81(C), pages 99-114.
    16. Valeriya Dinger & Sven Steinkamp & Frank Westermann, 2014. "The Tragedy of the Commons and Inflation Bias in the Euro Area," Open Economies Review, Springer, vol. 25(1), pages 71-91, February.
    17. Ekaterina Pirozhkova, 2017. "Financial frictions and robust monetary policy in the models of New Keynesian framework," BCAM Working Papers 1701, Birkbeck Centre for Applied Macroeconomics.
    18. Wei Cui & Wolfgang K. Härdle & Weining Wang, 2015. "Estimation of NAIRU with Inflation Expectation Data," SFB 649 Discussion Papers SFB649DP2015-010, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    19. Carrera, Cesar & Ledesma, Alan, 2015. "Proyección de la inflación agregada con modelos de vectores autorregresivos bayesianos," Working Papers 2015-003, Banco Central de Reserva del Perú.
    20. Shuhei Takahashi, 2017. "State Dependency in Price and Wage Setting," International Journal of Central Banking, International Journal of Central Banking, vol. 13(1), pages 151-189, February.

    More about this item

    Keywords

    central bank; budget; government debt;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pfq:journl:v:59:y:2014:i:4:p:492-510. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Adam Hoffmann (email available below). General contact details of provider: https://edirc.repec.org/data/bkeeehu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.