The US federal government is considering sending ‘helicopter money’ to Americans. Under current circumstances, helicopter money is an attractive alternative to outright monetary financing, especially for the US, according to analysts at Rabobank.
Key quotes
“Helicopter money will be very effective in helping people, preventing misery and even hunger among a substantial size of the population and it may also help to restore people’s confidence in the future.”
“People may spend the money or they may not. If people lack confidence in the future, they may decide to save the money for a rainy day and put it on a savings account (or keep it in the form of cash).”
“In normal recessions monetary financing seems to be more effective than helicopter money in stimulating economic activity. But in today’s situation, helicopter money may be the better option. Certainly in the US.”
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