Helicopter Drop (Helicopter Money)

Helicopter Drop (Helicopter Money)

In helicopter drops, governments create money to directly fund tax cuts or public spending. Helicopter money is an alternative to having central banks print money via quantitative easing to buy financial assets. Helicopter money is disseminated into the economy directly, unlike asset-purchase programmes, which have a more indirect transmission mechanism and disproportionately benefit the rich, since they cause asset-price inflation. One downside of helicopter money is that because it goes directly into the economy, it can be more inflationary.

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