Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/187460 
Authors: 
Year of Publication: 
2018
Series/Report no.: 
ROME Discussion Paper Series No. 18-02
Publisher: 
Research On Money in the Economy (ROME), s.l.
Abstract: 
Helicopter money has once been proposed as a theoretical thought experiment by Milton Friedman in order to elucidate the effect of money injections into the macroeconomy over time. However, some Euro area member states nowadays consider helicopter money, i.e. permanent Quantitative Easing (QE), as a permanent ingredient of future EMU governance. We set helicopter money apart from QE monetary policy measures and also distinguish it from a traditional fiscal stimulus. We then deal with and critically assess further developments of the helicopter money idea à la Bernanke und Buiter. Furthermore, the paper then comes up with three practical variants of helicopter money, basically available for the European Central Bank. Taking this as a starting point, the pros and cons of helicopter money and its closely defined implementation conditions are discussed. Finally, we derive some implications of helicopter money implementation for the monetary system as a whole.
Subjects: 
economic stimulus programmes
full reserve banking
helicopter money
interest rate
joint analysis of fiscal and monetary policy
Quantitative Easing
JEL: 
E52
E58
E63
Document Type: 
Working Paper

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