Helicopter Money as an Alternative Crisis Tool?

Did central banks contribute to the recent inflation shocks with low interest rates and bond purchases? And to the fact that asset values have risen so sharply for years? Would it have been better (then) to adopt a very different kind of expansionary monetary policy to counter the deflationary aftermath of the 2008 financial crisis? IMF economist Sascha Bützer has just published a widely acclaimed study on this question. In it, the researcher explains that and how a policy could work in which central banks do not send money to banks but directly to private households – the buzzword helicopter money.

We have discussed what speaks for and against this in our New Economy Short Cut with Sascha Bützer and comments from the Director of Financial Markets at DIW Berlin Dorothea Schäfer.