Pandemic Recession, Helicopter Money and Central Banking: Venice, 1630

Charles Goodhart, Donato Masciandaro () and Stefano Ugolini

No 15715, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper analyses the monetary policy that the Most Serene Republic of Venice implemented in the years of calamities using a modern equivalent of helicopter money, precisely an extraordinary money issuing, coupled with capital losses for the issuer. We consider the 1629 famine and the 1630-1631 plague as a negative macroeconomic shock that the incumbent government addressed using fiscal monetization. Consolidating the balance sheets of the Mint and of the Giro Bank, and having heterogenous citizens – inequality matters - we show that the Republic implemented what was, in effect, helicopter money driven by political economy reasons, in order to avoid popular riots.

Keywords: Monetary policy; Central banking; Helicopter money; Pandemic; Venice 1630 (search for similar items in EconPapers)
JEL-codes: D7 E5 E6 N2 (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-his, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Working Paper: Pandemic recession, helicopter money and central banking: Venice, 1630 (2021)
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