Central banks are already facilitating fiscal packages in various ways. But with the fiscal costs of the coronavirus likely to rise much further, policymakers might consider explicitly financing them with a permanent expansion of central bank money – the infamous “helicopter drop”. These are not the failsafe cure they are sometimes made out to be; indeed, in some circumstances, they offer little more than a QE-financed fiscal expansion. Nonetheless, in the current environment, it makes sense to try everything.
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