by FAS, 31 May 2020. PDF. Monetary deficit financing is the norm—after all, central banks distribute their profits. Monetary financing occurs in the context of regular open market operations and QE and, hyper charged, with helicopter drops. The question is not whether monetary policy should finance the government, but why it does so, and to what extent. Fiscal and monetary policy are inherently connected; what constitutes monetary policy is defined by objectives.
Topics:
Dirk Niepelt considers the following as important: Central Bank, Central bank profit, Contributions, European Central Bank, Fiscal monetary policy interaction, Fiscal policy, Helicopter drop, Monetary Policy, Open market operation, Quantitative Easing, Swiss National Bank
This could be interesting, too:
Dirk Niepelt writes “Fiscal and Monetary Policies,” Bern, Spring 2025
Dirk Niepelt writes Does the US Administration Prohibit the Use of Reserves?
Dirk Niepelt writes “Pricing Liquidity Support: A PLB for Switzerland” (with Cyril Monnet and Remo Taudien), UniBe DP, 2025
Dirk Niepelt writes “Report by the Parliamentary Investigation Committee on the Conduct of the Authorities in the Context of the Emergency Takeover of Credit Suisse”
FAS, 31 May 2020. PDF.
Monetary deficit financing is the norm—after all, central banks distribute their profits. Monetary financing occurs in the context of regular open market operations and QE and, hyper charged, with helicopter drops. The question is not whether monetary policy should finance the government, but why it does so, and to what extent. Fiscal and monetary policy are inherently connected; what constitutes monetary policy is defined by objectives.