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
- Urban development in Cupertino and SB 35
- My wife is good with faces, but I am pretty darn good with melodies
- Fulani arrested in Ghana over Burkina Faso ties?
- Recent reading: The Big Book of Science Fiction, edited by Ann and Jeff VanderMeer
- Production de livres du centre multimédia de Houndé au Burkina Faso
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