Helicopter money: survey evidence on expectation formation and consumption behaviour

Abstract

Abstract 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.