Central Banks as Fiscal Players

Willem Buiter is Visiting Professor of International and Public Affairs at Columbia University, New York. He was an academic economist for twenty-eight years. He was a founding external member of the Monetary Policy Committee of the Bank of England from 1997-2000 and has been an adviser to the IMF, the World Bank, the Inter-American Development Bank, the European Commission, central banks and finance ministries across the world.

• Introduction; 1. The central bank balance sheet: why it matters; Appendix to chapter 1: stochastic discount factors; 2. A stylized set of accounts for the Treasury, the central bank and the State; 3. Helicopter money drops; 4. The fallacy of the fiscal theory of the price level – and why it matters; Appendix to chapter 4: a formal approach to the FTPL; 5. Life at the zero lower bound and how to escape from it; 6. Why the Eurosystem isn't a proper central bank – and how to make it one.

'This book is the culmination of a long series of prior studies by the author into the proper accounting for a Central Bank within the balance sheet of the State, made particularly interesting by the fact that its liabilities are nowadays, usually, irredeemable. Willem Buiter rigorously examines important subjects such as how Central Bank operations add fiscal space to the Treasury; how helicopter money drops will always be expansionary; why the fiscal theory of the price level is just wrong, how deeply negative nominal interest rates can be implemented and why National Central Banks within the Euro-area are unusually exposed to risk.' Charles Goodhart, London School of Economics