{"id":18575,"date":"2016-03-07T13:29:01","date_gmt":"2016-03-07T18:29:01","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18575"},"modified":"2016-03-07T13:29:01","modified_gmt":"2016-03-07T18:29:01","slug":"time-for-helicopter-money","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18575","title":{"rendered":"Time for Helicopter Money?"},"content":{"rendered":"
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Time for Helicopter Money?<\/a><\/h3>\n<\/header>\n
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WASHINGTON, DC \u2013 \u201cOut of ammo?<\/a>\u201d\u00a0The\u00a0<\/i>Economist\u00a0<\/i>recently asked of monetary policymakers.\u00a0Stephen Roach<\/a>\u00a0has called the move by major central banks \u2013 including the Bank of Japan, the European Central Bank, and the Bank of Sweden \u2013 to negative real (and, in some cases, even nominal) interest rates a \u201cfutile\u201d effort that merely sets \u201cthe stage for the next crisis.\u201d And, at the February G-20 finance ministers meeting, Bank of England Governor Mark Carney reportedly called these policies \u201cultimately a zero-sum game.\u201d Have the major advanced economies\u2019 central banks \u2013 which have borne the burden of sustaining anemic post-2008 recoveries \u2013 really run out of options?<\/p>\n

It certainly seems so. Central-bank balance sheets have swelled, and policy rates have reached their \u201cnear zero\u201d lower bounds. There is plenty of cheap water, it seems, but the horse refuses to drink. With no signs of inflation, and growth still tepid and fragile, many anticipate\u00a0chronic slow growth<\/a>, with some even fearing another global recession.<\/p>\n

But policymakers have one more option: a shift to \u201cpurer\u201d fiscal policy, in which they directly finance government spending by printing money \u2013 a so-called \u201chelicopter drop.\u201d The new money would bypass the financial and corporate sectors and go straight to the thirstiest horses: middle- and lower-income consumers. The money could go to them directly, and through investment in job-creating, productivity-increasing infrastructure. By placing purchasing power in the hands of those who need it most, direct monetary financing of public spending would also help to improve inclusiveness in economies where inequality is rising fast.<\/p>\n

Helicopter drops are currently proposed by both leftist and centrist economists. In a sense, even some \u201cconservatives\u201d \u2013 who support more public infrastructure spending, but also want tax cuts and oppose more borrowing \u2013\u00a0de facto<\/i>\u00a0support helicopter drops.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Time for Helicopter Money? WASHINGTON, DC \u2013 \u201cOut of ammo?\u201d\u00a0The\u00a0Economist\u00a0recently asked of monetary policymakers.\u00a0Stephen Roach\u00a0has called the move by major central banks \u2013 including the Bank of Japan, the European Central Bank, and the Bank of Sweden \u2013 to negative real (and, in some cases, even nominal) interest rates a \u201cfutile\u201d effort that merely sets […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,240,282,5981,12797,8402,12798],"class_list":["post-18575","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-economic-growth","tag-european-central-bank","tag-helicopter-money","tag-kemal-dervis","tag-project-syndicate","tag-public-infrastructure"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18575"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18575\/revisions"}],"predecessor-version":[{"id":18576,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18575\/revisions\/18576"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18575"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}