The Economics of Helicopter Money

Pierpaolo Benigno and Salvatore Nisticò ()
Authors registered in the RePEc Author Service: Salvatore Nisticò

No 2001, Working Papers CASMEF from Dipartimento di Economia e Finanza, LUISS Guido Carli

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 e↵ective 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.

Keywords: Helicopter money; ZLB; Pandemic Crisis (search for similar items in EconPapers)
JEL-codes: E50 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2020-04
New Economics Papers: this item is included in nep-cba, nep-gen, nep-mac and nep-mon
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Related works:
Working Paper: The Economics of Helicopter Money (2022)
Working Paper: The Economics of Helicopter Money (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:lui:casmef:2001

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