Tag Archives: Transfer

Promising to do “whatever it takes” in order to avert a bad equilibrium is very different from printing money when the problem is a lack of resources, or their distribution. See Gilles Saint-Paul’s “Whatever it Takes.”

Ökonomenstimme, 3 April 2020. HTML. Shorter version published in NZZ. The aggregate Covid-19 shock calls for transfers of the type a pandemic insurance would have brought about. But we must not distort relative prices. They have to reflect scarcity, to provide incentives to overcome it. (This applies within countries but also across.)

NZZ, 2 April 2020. PDF. The aggregate Covid-19 shock calls for transfers of the type a pandemic insurance would have brought about. But we must not distort relative prices. They have to reflect scarcity, to provide incentives to overcome it. (This applies within countries but also across.)

In his blog, Ben Bernanke discusses the merits of “helicopter drops” as a monetary policy tool. [A] “helicopter drop” of money is an expansionary fiscal policy—an increase in public spending or a tax cut—financed by a permanent increase in the money stock. … the Fed credits the Treasury … in the Treasury’s “checking account” at the central bank, and those funds are used to pay for the new spending and the tax rebate. … it should influence the economy through a number of channels, making it...