Helicopter money

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A monetary policy committee can calibrate what is judged to be the proper level of debt monetisation needed to avert deflation in exactly the same way as the MPC or the FOMC calibrate interest rates... All debt accumulated by central banks under QE should be converted to perpetual non-interest bearing debt, and preferably burned on a pyre in public squares to the sound of trumpets to drive home the message that the debt has been eliminated forever. This will pre-empt the panic that might occur among investors and politicians should public debt ever cross some arbitrary totemic level. Any New Deal should be funded in the same way - partly or in whole - with the same vow that the debt will never be repaid. The money creation should continue at the therapeutic dose until the objective is achieved. There is no technical objection to this form of "fiscal dominance", as monetary guru Lars Svensson told the IMF forum. All that is missing is political will.

Negative interest rates are a calamitous misadventure - Telegraph

One thing he is not worried about is running out of monetary ammunition. “There is an argument that QE actually becomes more effective, the more you use it,” he said. As a central bank buys more bonds, the more it has to pay to convince the last hold-outs to sell their holdings. “The effect on the price plausibly becomes stronger and stronger,” he said. Prof Blanchard said the authorities should stick to plain vanilla QE rather than experimenting with “exotic stuff”. He waved aside talk of ‘helicopter money’ with contempt, calling it nothing more than a fiscal expansion by other means. It makes little difference whether spending is paid for with money or bonds when interest rates are zero.

Olivier Blanchard eyes ugly 'end game' for Japan on debt spiral