Journal of
Italian
Banking
Association
year 100
Italian
Banking
Association
year 100
Covid-19 helicopter money: the politics of an economic taboo
Donato MasciandaroMay 2020 - n. 5
Keywords: Covid-19, perpetual bonds, helicopter money, monetary policy
Jel codes: I10, E50, E52
It also happened with the Covid-19 recession: the helicopter money option appears whenever there is a significant economic crisis. But then the helicopter never flies. Politics can explain this economic taboo. The European Central Bank could define a social optimal helicopter money for financing European Perpetual Bonds. But as the redistributive effects of helicopter money increase, the risk of hostility towards the central bank increases, as the recent decision of the German Constitutional Court showed. For this reason a Covid-19 helicopter money could be technically feasible but it's politically unpalatable.
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