4 Pages Posted: 15 Dec 2010
Date Written: January 7, 2010
Those warning of “helicopter drops” of money by central bankers, as Ben Bernanke is often accused of doing in 2010, actually do not understand modern monetary operations. This post demonstrates that central bank operations generally are not helicopter drops, while fiscal operations in fact are. The exception for central banks would be purchasing financial assets from the non-government sector at a premium, or holding non-government sector assets that are defaulted upon.
Keywords: helicopter drops, central bank operations, fiscal operations
JEL Classification: E40, E42
Suggested Citation: Suggested Citation