BoE economists find CBDC could permit helicopter money
Helicopter drop could be feasible without losing control of rates but may still be unwise, authors say
The creation of a central bank digital currency (CBDC) could alleviate some of the challenges around monetary finance, or so-called helicopter money, according to research by two Bank of England economists.
In a helicopter money policy, a central bank injects money straight into the economy, either through cash handouts or a tax cut paid for by money printing.
Under standard assumptions, a central bank that chooses to pursue such a policy will give up control over the short-term interest rate
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