Discussion Paper Details

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Title: Public Liquidity Demand and Central Bank Independence

Author(s): Jean Barthelemy, Eric Mengus and Guillaume Plantin

Publication Date: November 2019


Programme Area(s): Monetary Economics and Fluctuations

Abstract: This paper studies how private demand for public liquidity affects the independence of a central bank vis-a-vis the fiscal authority. Whereas supplying liquidity to the private sector creates degrees of freedom for fiscal and monetary authorities vis-a-vis each other, we show that the authority that is most able to attract private liquidity demand can ultimately impose its views to the other.

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Bibliographic Reference

Barthelemy, J, Mengus, E and Plantin, G. 2019. 'Public Liquidity Demand and Central Bank Independence'. London, Centre for Economic Policy Research.