For years, central banks have been doing everything they can think of to try to get higher inflation and stronger growth. The next step just may be a metaphorical helicopter, high above Tokyo. The Bank of Japan met Friday to decide on the next steps in its long battle against deflation, or falling prices, and analysts had thought it might pursue some coordinated effort with the Japanese government using an idea with a long historical lineage. There had been buzz that the Bank of Japan could move in that direction, but it elected to take only a smaller action. It is an idea based on a metaphor used by the renowned economist Milton Friedman nearly five decades ago and given new life in this century by Ben Bernanke. It is also a policy that has echoes of some of the great catastrophes of economic history. They say desperate times demand desperate measures. Helicopter money is what monetary policy desperation looks like. What is helicopter money? Normally when we say that a central bank like the Federal Reserve or European Central Bank creates money from thin air, it does so by buying up bonds or other assets from banks using money that is just an electronic accounting entry.


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Ireland correspondent SMurphyTV. One of Ireland's top economists has urged governments to consider following Donald Trump's lead in giving away "free money" to boost pandemic-hit economies. David McWilliams, an author and former economist at the Central Bank of Ireland, said money should be printed and put into the accounts of the public and businesses in a bid to boost consumer spending and combat deflationary shock. The tactic is known as "helicopter money", or a "helicopter drop", a term coined by American economist Milton Friedman in the late s, as a metaphor for a government showering its people with cash from above. There have been some precedents set during the coronavirus crisis. What we're trying to do is to get money from the central bank to the people. The solution to a cash crisis is free money.