Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/320007 
Year of Publication: 
2020
Series/Report no.: 
CASMEF Working Paper Series No. WP 2020/01
Publisher: 
LUISS Guido Carli, Department of Economics and Finance, Arcelli Centre for Monetary and Financial Studies, Rome
Abstract: 
An economy plagued by a slump and in a liquidity trap has some options to exit the crisis. We discuss "helicopter money" and other equivalent policies that can reflate the economy and boost consumption. In the framework analysed – where lump-sum transfers may be the only effective fiscal response, like in the current pandemic crisis – the central bank, and only the central bank, is the rescuer of last resort of the economy. Fiscal policy is bounded by solvency constraints unless the central bank backs treasury's debt.
Subjects: 
Helicopter money
ZLB
Pandemic Crisis
JEL: 
E50
Document Type: 
Working Paper

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