Discussion Paper Details

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Title: Pandemic Recession, Helicopter Money and Central Banking: Venice, 1630

Author(s): Charles A Goodhart, Donato Masciandaro and Stefano Ugolini

Publication Date: January 2021

Keyword(s): central banking, Helicopter money, monetary policy, Pandemic and Venice 1630

Programme Area(s): Economic History and Monetary Economics and Fluctuations

Abstract: This paper analyses the monetary policy that the Most Serene Republic of Venice implemented in the years of calamities using a modern equivalent of helicopter money, precisely an extraordinary money issuing, coupled with capital losses for the issuer. We consider the 1629 famine and the 1630-1631 plague as a negative macroeconomic shock that the incumbent government addressed using fiscal monetization. Consolidating the balance sheets of the Mint and of the Giro Bank, and having heterogenous citizens ?? inequality matters - we show that the Republic implemented what was, in effect, helicopter money driven by political economy reasons, in order to avoid popular riots.

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Bibliographic Reference

Goodhart, C, Masciandaro, D and Ugolini, S. 2021. 'Pandemic Recession, Helicopter Money and Central Banking: Venice, 1630'. London, Centre for Economic Policy Research.