Jump to content
House Price Crash Forum

Bernanke Essay

Recommended Posts

Just read the following essay by Ben Bernanke on Japanese monetary policy and there is plenty to chew over for those trying to explain the recent US experience and what might come later. It also provides evidence of his famous 'helicopter drop' quotes.


What I am confused is the following statement (p162) :

"I think most economists would agree that a large enough helicopter drop must raise the price level...........................................................................

The only counterargument I can I can imagine is that the public might fear a future lump sumtax on wealth, inducing them to hold rather than spend extra balances. The newly circulated cash bears no interest and thus has no budgetary implications for government if prices remain unchanged"

Ok, here's what I dont understand: Why would there be NO BUDGETARY IMPLICATIONS in this scenario. We often talk of future generations picking up the bill of government deficit/spending, but apparently this is not the case.

Can anyone explain this feature in what is a fascinating read.



Edited by desertorchid
Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.