The spread of corona virus has led to crumbling of global demand growth,rising risk over global market. Helicopter money is monetary policy tool used for quantitative easing!
Definition of helicopter money-
” The money is used for a large sum of new money that is printed and distributed among the public ,to stimulate the economy during a recession or when interest rate fall to zero”.
The name helicopter money was first coined by American Economist Sir Milton Friedman in 1969. The concept was revived by economist as a monetary policy proposal.
Helicopter money is also referred as ‘ Helicopter drop’,in reference to a helicopter scattering supplies from the sky.
Helicopter money,basically non repayable money transfer for the central bank to government.
Sir Friedman used the term to signify ” unexpectedly dumping money onto a struggling economy with the intention to shock it out of a deep slump” .It can help comes out of morass..It’s aim to dump money into struggling economy
It also requires both monetary &fiscal policies to be carried out together , meaning central banks ang government co-operate with each other.
The policy intends to make money available for the people to nudge them to spend more . According to many economist this is right time for helicopter money to be apply…Many countries even follow the guidelines to use the process of using it.