Government bonds function equivalently to money
Government bonds are debt instruments issued by the state rather than fiat currency, and macroeconomic literature consistently treats them as financial assets or liabilities subject to interest rate shocks and risk management rather than functional equivalents to money.
The claim asserts that government bonds function equivalently to money. In economics and finance, money serves as a medium of exchange, unit of account, and store of value with high liquidity, whereas government bonds are fixed-income debt securities representing loans made to a government. None of the retrieved papers support the idea that bonds are functionally equivalent to money; instead, papers studying monetary policy, debt risks, and bond markets (such as [1], [8], and [10]) treat bonds as sovereign debt instruments and fiscal liabilities that respond to monetary policy rather than acting as currency itself. Therefore, the claim is refuted by standard financial and monetary definitions reflected in the literature.
Zheng L, Liu G, Liang Z, Liu C. Monetary policy, debt maturity structure and corporate investment efficiency: Evidence from China.. 2025. https://doi.org/10.1371/journal.pone.0328358
Monetary policy actively influences debt maturity structures and corporate investment efficiency, demonstrating that government bonds and debt instruments interact with monetary policy rather than functioning as money itself.
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Li Y, Zhang Q. Can participatory budgeting mitigate government debt risk？-An empirical analysis using cross-national panel data.. 2025. https://doi.org/10.1371/journal.pone.0324411
Participatory budgeting and explicit debt disclosures manage government debt risk, indicating that sovereign debt functions as a fiscal liability rather than baseline currency.
Ping WY, Hu YW, Luo LQ. Bond market opening, monetary policy, and systemic financial risks - An empirical study based on the TVP-SV-VAR model.. 2025. https://doi.org/10.1371/journal.pone.0335859
Bond market openings and monetary policies exhibit complex, time-varying interactions that impact systemic financial risks differently than the direct circulation of money.
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