A helicopter drop of money is a permanent /irreversible increase in the nominal stock of fiat base money with a zero nominal interest rate, which respects the intertemporal budget constraint of the consolidated Central Bank and fiscal aut hority/Treasury – henceforth the State. An example would be a temporary fiscal stimulus (say a one – off transfer payment to households, as in Friedman’s example), funded permanently through an increase in the stock of base money. It could also be a permanen t increase in the stock of base money through an irreversible open market purchase by the Central Bank of non -monetary sovereign debt held by the public – that is, QE . The reason is that QE, viewed as an irreversible or permanent purchase of non- monetary f inancial assets by the Central Bank funded through an irreversible or permanent increase in the stock of base money, relaxes the intertemporal budget constraint of the State.
Blogs I Follow
- Chang-Rae Lee’s On Such a Full Sea is a readable dystopia that really pushes the reader to think hard
- Enjoyed Cynthia Ozick’s story “The Coast of New Zealand” in The New Yorker
- Boneland by Alan Garner
- Encadrement du responsable du centre multimédia de Houndé (CMH) sur les techniques de rédaction des livres pour enfants
- Funny in Farsi by Firoozeh Dumas
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