 “Helicopter Dropâ€: Perspectives on Modern Central Banking ChallengesMunteanu Bogdan Romanian Economic Journal, 2017, vol. 20, issue 63, 117-125 Abstract: This paper aims to discuss the idea of Milton Friedman’s “helicopter drop†of money, analyzing the concept. It is an unconventional measure of monetary policy seen as a permanent uplift in the nominal monetary mass with a zero nominal interest rate, to finance budget deficit of fiscal authority from money issued by Central Bank. It could be a fiscal stimulus or purchases by the Central Bank of non-monetary sovereign debt, in both cases without affecting the current public spending from state budget. The paper takes into account the opportunity costs of such measure being deployed by ECB, looking at end-users (consumers) and psychology of decisions over money. In the end, the article reviews the opinions of leading economists and the conclusions reflect that it is not the time or necessity for ECB to resort to such measure now, as the previous measures of quantitative easing and negative interest rate are starting to pay-off producing the targeted result of 2% inflation rate. Keywords: Central bank; Helicopter Money; Interest Rates; Quantitative Easing for the People; Unconventional Monetary Policy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:rej:journl:v:20:y:2017:i:63:p:117-125 Access Statistics for this article Romanian Economic Journal is currently edited by Ioan Popa, PhD More articles in Romanian Economic Journal from Department of International Business and Economics from the Academy of Economic Studies Bucharest Contact information at EDIRC. |
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