Extended Ricardian Equivalence Theorem for Helicopter Money

Minseong Kim

MPRA Paper from University Library of Munich, Germany

Abstract: This paper develops the Extended Ricardian Equivalence Theorem for helicopter money. It is shown that helicopter money, or money printing, to finance fiscal spending is inconsistent with existence of an equilibrium under ordinary assumptions used to derive the Ricardian Equivalence theorem. By relaxing some equality constraints into inequality constraints or by an open economy assumption, one may be able to save helicopter money from not being a part of an equilibrium.

Keywords: helicopter money; money printing; seigniorage; fiscal policy; fiscal deficit; budget constraint (search for similar items in EconPapers)
JEL-codes: E13 E61 E62 (search for similar items in EconPapers)
Date: 2016-05-02
New Economics Papers: this item is included in nep-pke
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https://mpra.ub.uni-muenchen.de/71149/1/MPRA_paper_71149.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:71067

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