Helicopter Money: Survey Evidence on Expectation Formation and Consumption Behavior

50 Pages Posted: 6 Jan 2017 Last revised: 14 Sep 2019

See all articles by Uros Djuric

Uros Djuric

Technische Universität Darmstadt

Michael Neugart

Technical University of Darmstadt

Date Written: December 17, 2016


The effects of helicopter money on expectations and economic outcomes are empirically largely unexplored. We fielded a representative survey among the German population, randomly assigning respondents to various unconventional monetary policy scenarios that raise household income. We find that in all policy treatments people spend almost 40% of the transfer, which is a non-trivial share that could increase aggregate demand. Policies do not raise inflation expectations. Differences in how transfers are implemented appear to be mostly irrelevant because of idiosyncratic behaviour by households that largely does not take into account general equilibrium effects and governments' future policies.

Keywords: helicopter money, unconventional monetary policy, quantitative easing, inflation expectations, consumer behaviour, Ricardian equivalence, mental accounting

JEL Classification: E21, E52, E58, E63

Suggested Citation

Djuric, Uros and Neugart, Michael, Helicopter Money: Survey Evidence on Expectation Formation and Consumption Behavior (December 17, 2016). Available at SSRN: https://ssrn.com/abstract=2893008 or http://dx.doi.org/10.2139/ssrn.2893008

Uros Djuric

Technische Universität Darmstadt ( email )

D-64283 Darmstadt

Michael Neugart (Contact Author)

Technical University of Darmstadt ( email )

Hochschulstraße 1
Darmstadt, 64289

HOME PAGE: http://www.vwl3.wi.tu-darmstadt.de

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