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Will helicopter money be spent? New evidence

Author

Listed:
  • Maarten van Rooij
  • Jakob de Haan

Abstract

According to some economists, central banks should use 'helicopter money' (monetary financing of government expenditure or transfers to households) to boost inflation (expectations). Based on a survey among Dutch households, we examine whether respondents intend to spend the money received via such a transfer. Our findings suggest that only a small part of transfers will be spent and that such a transfer will hardly affect inflation expectations. Furthermore, whether transfers come from the central bank or the government hardly makes any difference. Finally, our results suggest that using helicopter money would have mixed consequences for public trust in the ECB.

Suggested Citation

  • Maarten van Rooij & Jakob de Haan, 2016. "Will helicopter money be spent? New evidence," DNB Working Papers 538, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:dnbwpp:538
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    References listed on IDEAS

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    More about this item

    Keywords

    Helicopter money; central banking; ECB; trust; unconventional monetary policy;

    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
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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