Helicopter Money: Survey Evidence on Expectation Formation and Consumption Behavior

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. AbstractThe eects of helicopter money on expectations and economic outcomes is empirically largely unexplored. We elded a representative survey among the German population randomly assigning respondents to various unconventional monetary policy scenarios that raise household income. We nd that in all policy treatments people spend almost 40% of the transfer. Spending shares are independent of whether the transfer is debt nanced and provided by the government or provided by the central bank as`helicopter money'. Policies do not raise ination expectations but induce uncertainty. Individuals' spending decisions are hardly correlated with measures on expectations.

Helicopter money in Europe: New evidence on the marginal propensity to consume across European households

“…The results of Japelli and Pistaferri (2014) for Italy and De Haan and van Rooij (2019) for the Netherlands are almost replicated. Only compared to Djuric and Neugart (2019) , who found an average MPC of about 40% for Germany, do we find a much higher MPC (of about 51%).…”

“… Japelli and Pistaferri (2014) documented an average MPC of about 48% for Italy, Djuric and Neugart (2019) one of about 40% for Germany, and De Haan and van Rooij (2019) one of 30% for the Netherlands. Furthermore, Christelis et al (2019) look specifically at the symmetry of a positive versus a negative income shock reporting an MPC of about 25% for Dutch households.…”

“…In a more recent contribution, Japelli and Pistaferri (2014) base their analysis on a hypothetical question in an Italian household survey to examine the marginal propensity to consume (MPC) out of windfall gains. More recently, the contributions of De Haan and van Rooij (2019) and Djuric and Neugart (2019) analyze similar survey questions for the Netherlands and Germany.…”

Would helicopter money be spent? New evidence for the Netherlands

“…For instance, survey measures of risk tolerance have been shown to predict risky health behaviour such as smoking and drinking (Barsky et al 1997). Other examples include Hurd, van Rooij, and Winter (2011) who show that respondents with expectations of positive stock market returns are more likely to enter 10 We have not asked how respondents would spend lottery wins, but Djuric and Neugart (2016) find that in all policy treatments for helicopter money people consider helicopter money as a windfall and spend the same amount they would spend out of a lottery win. 11 Christelis et al (2018) ask Dutch respondents how they would allocate a one-time bonus equal to one month or three months of income over four possible categories (saving, repaying debt, purchasing non-durables and purchasing durables) in the next 12 months.…”

“…Two recent papers that were independently written at about the same time as our study deal with similar issues. Djuric and Neugart (2016) fielded questions in a survey which constitutes a representative sample of the German population. They randomly divided participants into four sub-groups which were confronted with distinct versions of unconventional monetary and fiscal policy scenarios.…”