The political-economy considerations could thus be very important. But at the same time their relevance is likely to depend very much on other aspects of the institutional design of each central bank. The impact of central bank finances on policy performance may thus be far from straightforward and linear. It is therefore ultimately an empirical question whether any such link exists, and – if it does – how strong it is, and whether it can be offset by other institutional or economic features. Unfortunately, the empirical evidence on these crucial questions is scarce. In fact, we are aware of.
