{"id":19844,"date":"2016-04-12T12:26:27","date_gmt":"2016-04-12T17:26:27","guid":{"rendered":"http:\/\/olduvai.ca\/?p=19844"},"modified":"2016-04-12T12:26:27","modified_gmt":"2016-04-12T17:26:27","slug":"youve-been-warned-ben-bernanke-praises-helicopter-money-in-latest-blog-post","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=19844","title":{"rendered":"You\u2019ve Been Warned \u2013 Ben Bernanke Praises \u201cHelicopter Money\u201d in Latest Blog Post"},"content":{"rendered":"
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You\u2019ve Been Warned \u2013 Ben Bernanke Praises \u201cHelicopter Money\u201d in Latest Blog Post<\/a><\/h3>\n
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Don\u2019t say you weren\u2019t warned.\u00a0<\/strong><\/p>\n

What follows\u00a0are some excerpts from Banana Republic Ben\u2019s latest blog post titled,\u00a0What Tools Does the Fed Have Left? Part 3: Helicopter Money<\/a>.<\/p>\n

When monetary policy alone is inadequate to support economic recovery or to avoid too-low inflation, fiscal policy provides a potentially powerful alternative\u2014especially when interest rates are \u201cstuck\u201d near zero.\u00a0However, in recent years, legislatures in advanced industrial economies have for the most part been reluctant to use fiscal tools, in many cases because of concerns that government debt is already too high. In this context, Milton Friedman\u2019s idea of money-financed (as opposed to debt-financed) tax cuts\u2014\u201chelicopter money\u201d\u2014has received a flurry of attention, with influential advocates including\u00a0Adair Turner<\/a>,\u00a0Willem Buiter<\/a>, and\u00a0Jordi Gali<\/a>.<\/em><\/p>\n

In this post, I consider the merits of helicopter money as a (presumably last-resort) strategy for policymakers. I make two points. First, in theory at least, helicopter money could prove a valuable tool. In particular, it has the attractive feature that it should work even when more conventional monetary policies are ineffective and the initial level of government debt is high. However, second, as a practical matter, the use of helicopter money would involve some difficult issues of implementation. These include (1) the need to integrate the approach with standard monetary policy frameworks and (2) the challenge of achieving the necessary coordination between fiscal and monetary policymakers, without compromising central bank independence or long-run fiscal discipline. I propose some tentative solutions for these problems.<\/em><\/p>\n

To be clear, the probability of so-called helicopter money being used in the United States in the foreseeable future seems extremely low.\u00a0<\/em><\/p><\/blockquote>\n

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

You\u2019ve Been Warned \u2013 Ben Bernanke Praises \u201cHelicopter Money\u201d in Latest Blog Post Don\u2019t say you weren\u2019t warned.\u00a0 What follows\u00a0are some excerpts from Banana Republic Ben\u2019s latest blog post titled,\u00a0What Tools Does the Fed Have Left? Part 3: Helicopter Money. When monetary policy alone is inadequate to support economic recovery or to avoid too-low inflation, […]<\/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":[11702,68,303,5981,431,6174,534,3650],"class_list":["post-19844","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banana-republic","tag-ben-bernanke","tag-fed","tag-helicopter-money","tag-interest-rates","tag-michael-krieger","tag-monetary-policy","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19844","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=19844"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19844\/revisions"}],"predecessor-version":[{"id":19845,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19844\/revisions\/19845"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}