HALISTER1: Helicopter Money Is a ‘Very Unlikely Outcome,’ BofAML Says

Helicopter Money Is a ‘Very Unlikely Outcome,’ BofAML Says

(Bloomberg) -- “All helicopter money does in the end is replace debt-financed fiscal policy with money-financed fiscal policy,” BofAML economist Michael Hanson said in note.
  • Impact helicopter money will have on growth, inflation is “likely second-order at best”
  • Also, central banks can’t initiate helicopter money as it’s “fundamentally a fiscal policy”
  • Strong case can be made for targeted fiscal stimulus, such as public infrastructure investment, tax simplification
    • Approach doesn’t require central banks to relinquish their independence to fiscal authorities
    • With greater fiscal support, monetary policy can “normalize more quickly” than if it were “shouldering the entire burden of supporting an economy”
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Michael Hanson (Bank of America Corp)

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