What's up with helicopter money? Videos from gardening leave

Milton Friedman's 1969 article suggesting that governments could raise inflation by dropping cash from a helicopter onto the population below has been getting a lot of media attention.

My latest video from gardening leave outlines three potential problems with helicopter money. I do not think this is a policy that will work outside the pages of an academic journal.

The key difference between quantitative policy and helicopter money is that helicopter money is a permanent increase in the money supply. That permanence and the impact of that permanence on expectations is critical.

Advocates of helicopter money also seem to assume that an increase in price inflation is desirable. I wrote an article in the Nikkei Asian Review recently that suggests this is the wrong approach. The problem is that for a country like Japan the rate of price inflation is too high (on the measure that matters), and raising inflation through helicopter money could make things worse.

Please take a look at the video (also available on my YouTube channel). Comments and feedback are always welcome, as are likes, forwarding on, and attempts to get the videos to go viral. Because really, any video on economics should go viral.

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My two earlier “economics on gardening leave” videos are below.