English version

In the attached whitepaper we propose a new monatary system with a new monetary policy. In the present system, only banks and government have an account with the Central Bank. In our proposal all economic actors have such accounts. There is a public organization which takes care of storage and trensfer of this so called base money. That does not depend any longer on the banks. This base money is the only legal tender. And the value of each account balance is guaranrteed by linking the accounts with the (nominal) GDP.  Not the value of a unit of money is linked, but the value of the total account balance. The buying power is guaranteed in this way.

One may call this robust money. It is a way to create stability in the monetary world, hopefully resulting in more attention for the real economy.

Kees van Hee (professor emeritus TU/e, ICT) and Jacob Wijngaard (professor emeritus RuG, Oper. Mgmt.)



Addendum 1: The monetary policy developed in the white paper proposes the application of GDP-linked accounts. That makes it necessary to have a daily estimate of the GDP. We sketched a procedure with the GDP estimate based on the year sum (sum over the last year) of all real transactions. This year sum can be monitored easily. The official estimates of the GDP are used to normalize this transaction sum to the GDP. An alternative procedure is to develop a GDP-proxy that can be monitored directly. That possibility is explored in the next note.

GDP proxy v2


Addendum 2: An important claim of the paper is that it makes the application of simple rules sufficient. That leads to a stable monetary system. This claim is further explored in the next note, plus accompanying Excel simulation.

Estimating the Amount of Base Money that is Necessary