Note on Money-Financed Policy

11 Pages Posted: 2 May 2017

See all articles by Masaru Aoki

Masaru Aoki

The Japan Research Institute, Limited

Date Written: May 25, 2019


This note summarizes the outline of "money-financed policy." We review some policies for improving fiscal balance, and insist that money-financed policy has the greatest potential to increase social welfare as compared to other policies.

Also, we show the effect of money-financed policy on GDP using Eggertsson, Mehrotra and Robbins (2017) model.

Keywords: integrated government budget constraint, government bonds, money-financed policy

JEL Classification: E31, E52, E58, E61, E62

Suggested Citation

Aoki, Masaru, Note on Money-Financed Policy (May 25, 2019). Available at SSRN: or

Masaru Aoki (Contact Author)

The Japan Research Institute, Limited ( email )


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