A Central Bank Theory of Price Level Determination

Benigno, Pierpaolo (2020). A Central Bank Theory of Price Level Determination. American economic journal. Macroeconomics, 12(3), pp. 258-283. American Economic Association 10.1257/mac.20190008

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This paper develops a theory in which the central bank can control the price level without fiscal backing. It is shown that the remittances policy and the balance sheet of the central bank are important elements to specify. A central bank that is appropriately capitalized can succeed in controlling prices by setting the interest rate on reserves, holding short-term assets, and rebating its income to the treasury from which it has to maintain financial independence.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Benigno, Pierpaolo

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

1945-7707

Publisher:

American Economic Association

Language:

English

Submitter:

Dino Collalti

Date Deposited:

11 Jan 2021 14:17

Last Modified:

11 Jan 2021 14:27

Publisher DOI:

10.1257/mac.20190008

BORIS DOI:

10.7892/boris.150274

URI:

https://boris.unibe.ch/id/eprint/150274

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