A better way to account for fiat money at the Central Bank
AbstractProper monetary accounting rules are: (1) Central Banks should conform to the practice of the US Federal Reserve to distinguish its Balance Sheet from its Statement of Conditions. (2) Fiat money should not appear as a liability in a Balance Sheet. (3) The Central Bank should not record more government bonds than required for open market operations. Surplus bonds should be accounted as being void (on loan from the government who should destroy them). If these rules are not observed, a wrong measure of government debt arises, distorting the requirements for policy making.
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Bibliographic InfoPaper provided by EconWPA in its series General Economics and Teaching with number 0512014.
Length: 4 pages
Date of creation: 31 Dec 2005
Date of revision:
Note: Type of Document - doc; pages: 4. Composed in Word for Windows on a Windows XP machine
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Fiat Money; Money; Central Bank; Government Debt; Seigniorage; Inflation Tax; Gold Standard; Accounting;
Find related papers by JEL classification:
- A00 - General Economics and Teaching - - General - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-24 (All new papers)
- NEP-CBA-2006-01-24 (Central Banking)
- NEP-FMK-2006-01-24 (Financial Markets)
- NEP-MAC-2006-01-24 (Macroeconomics)
- NEP-MON-2006-01-24 (Monetary Economics)
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- Colignatus, Thomas, 2013. "Money as gold versus money as water," MPRA Paper 45759, University Library of Munich, Germany, revised 02 Apr 2013.
- Seigniorage in Wikipedia (English)
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