Central Banks as Fiscal Players

It is well known that the balance sheets of most major central banks significantly expanded in the aftermath of the financial crisis of 2007-2011 but the consequences of this expansion are not well understood. This book develops a unified framework to explain how and why central bank balance sheets have expanded and what this shift means for fiscal and monetary policy. Buiter addresses a number of key issues in monetary economics and public finance including how helicopter money works when modern monetary theory makes sense why the Eurosystem has a potentially fatal design flaw why the fiscal theory of the price level is a fallacy and how to escape from the zero lower bound....See More