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
- I get it and I don’t get it…. mocking earnestness and mocking people are not the same thing
- Excession, by Iain Banks
- I listened. The Republicans are not saying much. Rep. Sensenbrenner (R,WI) offers an oped in the New York Times
- Greatest song ever recorded, for its voice, and lilting but complex melody: Myan Myan by Coupé Cloué
- “Sevastopol” by Emilio Fraia in The New Yorker
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