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A better way to account for fiat money at the Central Bank

Author

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  • Thomas Colignatus

    (Thomas Cool Consultancy & Econometrics)

Abstract

Proper 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.

Suggested Citation

  • Thomas Colignatus, 2005. "A better way to account for fiat money at the Central Bank," General Economics and Teaching 0512014, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpgt:0512014
    Note: Type of Document - doc; pages: 4. Composed in Word for Windows on a Windows XP machine
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/get/papers/0512/0512014.doc
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    Cited by:

    1. Colignatus, Thomas, 2011. "High Noon at the EU corral. An economic plan for Europe, September 2011," MPRA Paper 33476, University Library of Munich, Germany, revised 19 May 2010.
    2. Colignatus, Thomas, 2011. "Conditions for turning the ex ante risk premium into an ex post redemption for EU government debt," MPRA Paper 34816, University Library of Munich, Germany, revised 17 Nov 2011.
    3. Colignatus, Thomas, 2013. "Money as gold versus money as water," MPRA Paper 45759, University Library of Munich, Germany, revised 02 Apr 2013.

    More about this item

    Keywords

    Fiat Money; Money; Central Bank; Government Debt; Seigniorage; Inflation Tax; Gold Standard; Accounting;

    JEL classification:

    • A00 - General Economics and Teaching - - General - - - General

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