What is Helicopter Money?
- Helicopter money is a concept in economics where central banks distribute money directly to citizens rather than through the traditional banking system.
- This is done by creating new money and distributing it to the public through various means, such as tax rebates, direct payments, or vouchers.
- The term “helicopter money” was first coined by economist Milton Friedman in 1969, who used it as a metaphor for dropping money from a helicopter to stimulate the economy.
- The idea has gained renewed interest in recent years, particularly in response to economic crises such as the COVID-19 pandemic, to provide direct relief to individuals and stimulate spending.
- However, there are concerns about the potential inflationary effects of such policies and the long-term sustainability of financing them.