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
- Recent stories in The New Yorker
- Aldous Harding covers “Right Down The Line” by Gerry Rafferty
- Budget transparency at private universities: Some thoughts about SCU
- Why does SCU want to take the faculty unionization straight to the NLRB? Because they could reverse every unionization on every Jesuit and other “religious” university
- Tactics when confronting a Trump-appointee dominated NLRB: “three would-be unions withdraw petitions”
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