Helicopter Money Case Study
Markets Soar as Japan Starts Up Rotors for Helicopter Money Following Bernanke Visit
Despite worrisome economic indicators, markets recently soared to all-time highs based on speculation that Japan plans to inject helicopter money into its economy to combat the country 's deflation. This best-guess prognostication was fueled by former Federal Reserve chairman Ben Bernake 's dramatic visit to meet with Japanese leaders to discuss stimulus packages and helicopter money according to a report posted on Zerohedge.com. Helicopter money, which is also called direct debt monetization, is a controversial economic approach that involves central monetary policymaking …show more content…
The program enjoyed limited success by lowering interest rates but never resulted in big increases in lending, so the U.S. economy remained sluggish according to a report in Fortune.com. Helicopter money is seen as a last result to inject money into the economy directly without going through the banks--essentially printing money or increasing the monetary supply without tying the increase to gross national product output.
Bernanake 's writings discussed the challenges of implementing a "helicopter money" policy, according to an article posted on Forbes.com, so Japanese financial leaders were anxious to consult with Bernanke before implementing such a policy. Bernanke 's visit to Japan was enough evidence to send stock prices soaring despite Japanese policymakers denying that they were considering direct debt monetization, or helicopter money, to fight deflation according to a report on