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The economics of helicopter money

Author

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  • Benigno, Pierpaolo
  • Nisticò, Salvatore

Abstract

The economics of helicopter money is fundamentally tied to price-level determination in monetary models. In frameworks with intrinsically worthless currencies, the issuer’s liabilities define the unit of account, and uniquely empower the issuer to implement helicopter money and escape liquidity traps. While traditional helicopter money requires cooperation between the treasury and the central bank — with the central bank critically guaranteeing treasury debt — we demonstrate that helicopter money can also be effectively executed independently by government or private currency issuers, without treasury involvement.

Suggested Citation

  • Benigno, Pierpaolo & Nisticò, Salvatore, 2025. "The economics of helicopter money," Journal of Monetary Economics, Elsevier, vol. 152(C).
    • Handle: RePEc:eee:moneco:v:152:y:2025:i:c:s030439322500039x
    DOI: 10.1016/j.jmoneco.2025.103768
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    Keywords

    Helicopter money; Price-level determination; Liquidity trap;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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