Primers

A Primer on Helicopter Money

Helicopter money is not monetary policy. It is a fiscal policy carried out with the cooperation of the central bank. That is, if the Fed were to drop $100 bills out of helicopters, it would be doing the Treasury’s bidding.

We are wary of joining the cacophony of commentators on helicopter money, but our sense is that the discussion could use a bit of structure...

Steve Cecchetti and Kim SchoenholtzJune 27, 2016Helicopter money, Monetary policy, Fiscal policy, Treasury balance sheet, Central bank balance sheet, Interest on excess reserves, Effective lower bound, ELB, Fiscal dominance, Rollover risk, M2, Central bank money, Monetary base, Transactions money, Milton Friedman, Primer

A Primer on Central Bank Independence

Central bank independence is controversial. It requires the delegation of powerful authority to a group of unelected officials. In a democracy, this anomaly naturally raises questions of legitimacy. It also raises fears of the concentration of power in the hands of a select few.

An independent central bank is a device to overcome the problem of time consistency: the concern that policymakers will renege in the future on a policy promise made today ....

Steve Cecchetti and Kim SchoenholtzNovember 16, 2015Monetary policy, Financial stability, Time consistency, Central bank independence, Macroprudential regulation, Delegation, Democracy, Transparency, Accountability, Primer

Primers

Primers

Money, Banking, and Financial Markets