Will Helicopter Money Be Spent? New Evidence

39 Pages Posted: 15 Dec 2016

See all articles by Maarten van Rooij

Maarten van Rooij

De Nederlandsche Bank; Netspar

Jakob de Haan

University of Groningen - Faculty of Economics and Business; De Nederlandsche Bank; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: December 14, 2016

Abstract

According to some economists, central banks should use ‘helicopter money’ (monetary financing of government expenditure or transfers to households) to boost inflation (expectations). Based on a survey among Dutch households, we examine whether respondents intend to spend the money received via such a transfer. Our findings suggest that only a small part of transfers will be spent and that such a transfer will hardly affect inflation expectations. Furthermore, whether transfers come from the central bank or the government hardly makes any difference. Finally, our results suggest that using helicopter money would have mixed consequences for public trust in the ECB.

Keywords: helicopter money, central banking, ECB, trust, unconventional monetary policy

JEL Classification: E52, E58, D14

Suggested Citation

van Rooij, Maarten and de Haan, Jakob, Will Helicopter Money Be Spent? New Evidence (December 14, 2016). De Nederlandsche Bank Working Paper No. 538. Available at SSRN: https://ssrn.com/abstract=2885813 or http://dx.doi.org/10.2139/ssrn.2885813

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Jakob de Haan

University of Groningen - Faculty of Economics and Business ( email )

PO Box 800
Groningen, 9700 AV
Netherlands
+31 0 50 3633706 (Fax)

De Nederlandsche Bank ( email )

P.O. Box 98
Amsterdam, 1000 AB
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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