Will Helicopter Money Be Spent? New Evidence

Abstract

According to some economists, central banks should use ‘helicopter money’ (monetary financing of government expenditure or transfers to households) to boost inflation (expectations). Based on a survey among Dutch households, we examine whether respondents intend to spend the money received via such a transfer. Our findings suggest that only a small part of transfers will be spent and that such a transfer will hardly affect inflation expectations. Furthermore, whether transfers come from the central bank or the government hardly makes any difference. Finally, our results suggest that using helicopter money would have mixed consequences for public trust in the ECB.