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Eurozone Debt Monetization and Helicopter Money Drops: How Viable can this be?

Author

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  • Νikolaos A. Kyriazis

    (Department of Economics, University of Thessaly, Greece)

Abstract

After the outburst of the recent financial crisis, the subsequent unconventional monetary acting that seemed to be a veritable revolution tends to become a norm. This paper makes an effort to employ the modern monetary theory framework to address the nowadays recession in the Eurozone through the prism of debt perpetuation and the more drastic helicopter money drops. Dynamics of debt monetization and issues of its sustainability are examined in connection to its free liquidity injections capacity. The aim of this paper is to try to cast some light on the potential of overt money financing in the Eurozone (EZ) and its consequences on the ECB’s credibility and the maintenance of its efficacy.

Suggested Citation

  • Νikolaos A. Kyriazis, 2017. "Eurozone Debt Monetization and Helicopter Money Drops: How Viable can this be?," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 6(3), pages 5-15.
    • Handle: RePEc:cbk:journl:v:6:y:2017:i:3:p:5-15
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    File URL: http://www.cbcg.me/repec/cbk/journl/vol6no3-1.pdf
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    Cited by:

    1. Aleksandra Praščević & Milutin Ješić, 2019. "Modeling Macroeconomic Policymakers’ Interactions under Zero Lower Bound Environment: The New Keynesian Theoretical Approach," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 8(1), pages 5-38.

    More about this item

    Keywords

    Unconventional monetary policy; Helicopter money; Debt monetization; Eurozone;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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