Helicopter money
€25K handouts would not affect labour market – ECB paper
Stimulus packages are effective in raising consumption, researchers argue
Monetary innovation required to respond to next crisis – Riksbank’s Breman
Deputy governor thinks fiscal and monetary policy co-ordination will be increasingly important
Austrian paper estimates effects of European helicopter money
Researchers use data on likely consumption of windfall income from survey of 17 European countries
Fed could exploit helicopter money with digital currency system – former officials
Simon Potter and Julia Coronado propose recession insurance bonds, consumer QE and Fed-backed digital currency as crisis tools
The ECB, the lockdown and the monetary financing lock
The eurozone’s central bank may need to break its prohibition on monetary financing to fight the pandemic
The Central Bank Digital Currency Survey 2020 – debunking some myths
Most central banks believe there are retail uses for central bank digital currencies, but few plan to launch a CBDC in the coming five years, with most rejecting the use of blockchain
Bank of England to lend directly to government
Central bank agrees temporary expansion of “Ways and Means” facility
Do low rates spur investment?
Many believe low interest rates spur investment, but there appears to be little hard evidence to support such claims, writes former IMF head Jacques de Larosière
Tackling ‘dead-end’ monetary policy
A shift to lower inflation targets would help central banks escape forever-loose monetary policy, writes former IMF chief Jacques de Larosière
Fischer and Hildebrand call for emergency policy tools
Former central bank chiefs say existing monetary tools are “almost exhausted”
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
BoE bloggers suggest central banks could use equity-financed QE
Economists raise ideas for future balance sheet innovations, including digital currencies, helicopter money drops and equity-based quantitative easing
Book notes: Can We Avoid Another Financial Crisis?, by Steve Keen
Steve Keen challenges “mainstream” economic thinking in this concise book, hoping to shift the political debate on debt
Fed paper warns on helicopter money risks
Tool appears much less powerful when less realistic elements of the New Keynesian framework are removed; other options could work better, authors say
Monetary policy has inevitable fiscal effects – Willem Buiter
Former Bank of England official rails against fiscal theory of the price level in speech to RBI, but says monetary policy still cannot escape its fiscal dimension
Helicopter money would have little impact, Dutch paper says
Household survey suggests little impact on inflation expectations, researchers argue
What else can central banks do?
Geneva Report’s plea for central banks to use more negative rates, additional QE and helicopter drops appears misguided
ECB's Mersch cautions against ‘extreme’ policy measures
Central bank cannot fulfil mandate with “mathematical equations”, says Mersch, warning currency can be undermined by “extreme measures”
Kuroda says BoJ will not reduce easing, but helicopter money is not on its way
Governor offers clues on the central bank’s “comprehensive assessment” of its monetary policy, saying there are no limits to the scale of easing, but some policies are off the table
Helicopters bearing gifts
As QE and negative rates run out of room, helicopter money could be a last resort for overstretched central banks. But its detractors say the cost of its use could be very high