A REVIEW OF HELICOPTER MONEY

Filip Novinc
Additional contact information
Filip Novinc: University of Zagreb, Faculty of Economics and Business Zagreb

Ekonomski pregled, 2023, vol. 74, issue 6, 871-896

Abstract: Over the years before the 2020 pandemic crisis, monetary financing and helicopter money were becoming increasingly popular. Since helicopter money is a radical and controversial instrument of economic policy, many economists still dismiss it, while others argue it might be useful particularly in deflationary economies facing aggregate demand shortage. This paper aims to provide an extensive review of recent literature on helicopter money and to the best of our knowledge delivering the most comperhensive review of studies involving its effectiveness. Other goals include a discussion of its advantages and limitations and potential problems among solutions that are linked to this tool. There is certain evidence such a policy can act countercyclically under given conditions without notable side effects. No convincing proof was found helicopter money would ultimately lead to uncontrollable inflation. Potential problems that come before, during, and after helicopter money implementation have attainable solutions. Policymakers have technical knowledge for its implementation. What is missing is a broader consensus and political willingness to implement the measure and find a set of rules and responsibilities that prevent its abuse. More academic and business discussion is needed to shed light on both positive and negative consequences that might arise while answering the question of whether it is time to take a different path in economic policy since helicopter money involves more cooperation between monetary and fiscal authorities and requires particular institutional changes.

Keywords: helicopter money; monetary financing; money financing of budget deficits; direct money transfer to households (search for similar items in EconPapers)
JEL-codes: B52 E52 E63 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.32910/ep.74.6.4 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hde:epregl:v:74:y:2023:i:6:p:871-896

Ordering information: This journal article can be ordered from
Ekonomski pregled, Hrvatsko društvo ekonomista, Heinzelova 4a, 10000 Zagreb, Croatia
http://www.hde.hr/pregled_en.aspx

Access Statistics for this article

Ekonomski pregled is currently edited by Josip Tica

More articles in Ekonomski pregled from Hrvatsko društvo ekonomista (Croatian Society of Economists) Contact information at EDIRC.
Bibliographic data for series maintained by Josip Tica ().