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Pandemic recession and helicopter money: Venice, 1629–1631

Author

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  • Masciandaro, Donato
  • Goodhart, Charles
  • Ugolini, Stefano

Abstract

We analyse the money-financed fiscal stimulus implemented in Venice during the famine and plague of 1629–31, which was equivalent to a ‘net-worth helicopter money’ strategy – a monetary expansion generating losses to the issuer. We argue that the strategy aimed at reconciling the need to subsidize inhabitants suffering from containment policies with the desire to prevent an increase in long-term government debt, but it generated much monetary instability and had to be quickly reversed. This episode highlights the redistributive implications of the design of macroeconomic policies and the role of political economy factors in determining such designs.

Suggested Citation

  • Masciandaro, Donato & Goodhart, Charles & Ugolini, Stefano, 2021. "Pandemic recession and helicopter money: Venice, 1629–1631," Financial History Review, Cambridge University Press, vol. 28(3), pages 300-318, December.
    • Handle: RePEc:cup:fihrev:v:28:y:2021:i:3:p:300-318_2
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    Cited by:

    1. McLaughlin, Eoin & Sharp, Paul & Skovsgaard, Christian Volmar & Vedel, Christian, 2024. "Milk Wars: Cooperation, Contestation, Conflict and the Irish War of Independence," CAGE Online Working Paper Series 737, Competitive Advantage in the Global Economy (CAGE).
    2. Donato Masciandaro & Davide Romelli & Stefano Ugolini, 2023. "Fiscal Dominance, Monetary Policy and Exchange Rates: Lessons from Early-Modern Venice," BAFFI CAREFIN Working Papers 23205, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    3. Robert J R Elliott & Fabio Gatti & Eric Strobl, 2024. "The Trade Effects of the Plague: The Saminiati and Guasconi Bank of Florence (1626-1634)," Working Papers 0271, European Historical Economics Society (EHES).
    4. Rania Adel Al-Bawwab, 2022. "The zecca mint: a self-enforcing monetary constitution in historic venice," Economics of Governance, Springer, vol. 23(1), pages 1-15, March.
    5. Benigno, Pierpaolo & Nisticò, Salvatore, 2025. "The economics of helicopter money," Journal of Monetary Economics, Elsevier, vol. 152(C).
    6. Alfani, Guido & Di Tullio, Matteo & Fochesato, Mattia, 2025. "Wealth Inequality and Epidemics in the Republic of Venice (1400–1800)," SocArXiv 4tny3_v1, Center for Open Science.

    More about this item

    JEL classification:

    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance
    • N0 - Economic History - - General

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