Martin Wolf and Buiter about Helicopter Money
In exceptional circumstances, such as times of war, deep depressions or pandemics, it is the job of the central bank to support the overriding need for the state to protect people’s lives and livelihood.
Only the craziest libertarian would disagree.
As an organ of the state, the central bank must help. Its independence, while normally desirable, is a means to an end, not an end in itself. Even price stability is not overriding in all circumstances. Other things matter.
Only the craziest libertarian would disagree.
As an organ of the state, the central bank must help. Its independence, while normally desirable, is a means to an end, not an end in itself. Even price stability is not overriding in all circumstances. Other things matter.
Even “helicopter money” might well be fully justifiable in such a deep crisis.
“Independence doesn’t mean having to say no to a request for direct monetization,” says Willem Buiter, a former Bank of England policy maker and Citigroup chief economist.
“It means you can say yes or no.”
MMTers say the question of whether spending is financed by treasury bonds or central-bank reserves isn’t a big deal -- since both are government liabilities in the end.
What matters is whether the spending triggers inflation.
Bloomberg 19 April 2020
“It means you can say yes or no.”
MMTers say the question of whether spending is financed by treasury bonds or central-bank reserves isn’t a big deal -- since both are government liabilities in the end.
What matters is whether the spending triggers inflation.
Bloomberg 19 April 2020
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