Discussion paper

DP17180 Helicopter money: what is it and what does it do?

We review the different meanings of helicopter money both in the literature and in the public debate around it, and clarify the conditions under which helicopter money can have an impact on real activity. To do so, we set out a simple model that encapsulates a number of potential channels of policy transmission. The model provides a taxonomy of possibilities for helicopter money to affect the economy, as well as a benchmark set of conditions under which it is neutral. We use the model to analyse and discuss the impact that helicopter drops might have in response to a number of economic shocks, including a financial crisis, a fiscal crisis, and a pandemic.


Reis, R and S Tenreyro (2022), ‘DP17180 Helicopter money: what is it and what does it do?‘, CEPR Discussion Paper No. 17180. CEPR Press, Paris & London. https://cepr.org/publications/dp17180