Must-Read: Eric Lonergan: A Brief Reply to Paul Krugman on Policy Equivalence

Must-Read: Eric Lonergan: A Brief Reply to Paul Krugman on Policy Equivalence:

Helicopter money is partly useful precisely because it addresses the institutional failure of fiscal policy…

It gives central banks an effective policy tool and it maintains the important institutional division of labour between fiscal and monetary authorities (Simon Wren-Lewis is compulsory reading on this – bear in mind his preferred form of HM is direct transfer from independent CBs). We don’t have to get into philosophical differences between bond financing v monetary financing and whether money is unique…