Quantitative Easing and the Helicopter Drop

Over the last few decades economists and policymakers came to regard macroeconomic policies as the holy grail that could smoothen business cycles. This confidence has been badly shaken in the aftermath of the global financial crisis. Aggressive and unconventional monetary policies have been unable to put Humpty Dumpty back on the wall again. This article examines the working and possible implications of quantitative easing and the helicopter drop, the two unconventional monetary policies beyond the prevailing zero bound policy rates in advanced economies.