Helicopter Money

A central bank financing direct cash handouts to the public to fight deflation.

Helicopter money is Milton Friedman's thought experiment — imagine dropping cash from a helicopter — for the most direct possible stimulus: newly created central-bank money given straight to citizens or to the government to spend, with no offsetting debt to repay. Unlike quantitative easing, which swaps assets with banks, helicopter money permanently expands the money supply into consumers' hands. It's the tool of last resort against deflation, and its taboo status comes from history: monetary financing of governments is how hyperinflations have started.

Economists debated whether the pandemic checks amounted to helicopter money, since the central bank was buying the debt that funded them.