IMF Working Papers

Advancing the Monetary Policy Toolkit through Outright Transfers

By Sascha Buetzer

May 6, 2022

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Sascha Buetzer. Advancing the Monetary Policy Toolkit through Outright Transfers, (USA: International Monetary Fund, 2022) accessed November 8, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper argues that in reserve currency issuing economies at the effective lower bound, outright transfers from the central bank to households are both more equitable and more effective in achieving monetary policy objectives than asset purchases or negative interest rates. It shows that concerns pertaining to central banks’ policy solvency and equity position can be addressed through a careful assessment of a central bank's loss absorbing capacity and, if need be, tiered reserve remuneration policies. It also spells out key differences to a debt or money financed fiscal stimulus, which are particularly pronounced in a currency union without a central fiscal capacity. The paper concludes by discussing broader institutional, political, and legal considerations.

Subject: Central bank balance sheet, Central banks, Financial statements, Fiscal policy, Monetary policy, Public debt, Public financial management (PFM), Unconventional monetary policies

Keywords: Central Bank Balance Sheet, Central Bank Equity, Central Bank Solvency, Equity position, Financial statements, Global, Helicopter Money, Inequality, Monetary Policy, Outright Transfers, Policy solvency, Revaluation account, Unconventional monetary policies

Publication Details

  • Pages:

    60

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2022/087

  • Stock No:

    WPIEA2022087

  • ISBN:

    9798400209949

  • ISSN:

    1018-5941

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