Table of Contents
Economics Research International
Volume 2011 (2011), Article ID 930672, 7 pages
http://dx.doi.org/10.1155/2011/930672
Research Article

Comparative Statics of Central Bank Liquidity Management: Some Insights

Executive Office, Qatar Central Bank, P.O. Box No. 1234, Doha, Qatar

Received 2 December 2010; Accepted 31 May 2011

Academic Editor: Taufiq Choudhry

Copyright © 2011 Indranil Bhattacharyya and Satyananda Sahoo. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

The paper demonstrates the efficacy of liquidity management through both the rate and quantum channels. Using the concepts of autonomous and discretionary liquidity, the paper derives the optimal policy mix of instruments which can be used for stabilizing the price of liquidity. For effective liquidity management, the sufficient condition highlighted in the paper has important implications for developing market-related monetary policy instruments, particularly in emerging market economies.