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Economic Viewpoint

The helicopter money

October 6, 2016
François Dupuis, Vice-President and Chief Economist • Hendrix Vachon, Senior Economist

“Helicopter money” is a term used to describe a specific type of monetary policy: monetary financing. With this type of policy, economic stimulus is no longer primarily provided through the credit channel, but rather by the direct transfer of money from the central bank to the government or consumers. No central bank is currently using this type of stimulus but, given the ongoing trouble some of them are having in stimulating demand and generating inflation, that could eventually change. The Bank of Japan, for example, is struggling to get Japan’s economy out of deflation sustainably.

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