Should Governments Drop Money Out of Helicopters?
The Inquiry
BBC
4.6 • 1.7K Ratings
🗓️ 8 December 2015
⏱️ 23 minutes
🧾️ Download transcript
Summary
Imagine waking up one morning to the sound of a helicopter overhead. You look out and see that packages are being dropped in front of the homes of everyone on your street. You race downstairs, and tear open your package. Inside? Exactly $10,000 in new bills. A gift of freshly-printed money from your government – no strings attached. What would you do? Economists hope you would go out and spend – and that your spending would help kick start the post-industrial economies which many fear are grinding, inexorably, to a complete halt.
We explore whether so-called “helicopter money” (more likely, money would simply be wired to your account) really is a solution to the problem of a low- or no-growth future. Our expert witnesses include: Adair Turner, the former head of Britain’s Financial Services Authority, who is prescribing just such economic medicine; Mohamed El-Erian, chairman of President Obama's Global Development Council; Professor Barry Eichengreen of Berkeley University in the United States and Richard Koo, formerly of the Federal Reserve Bank of New York and an economic advisor to successive Japanese governments. Presented by Linda Yueh.
(Photo: Helicopter at G7, Credit: Getty Images)
Transcript
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| 0:00.0 | Hi, thanks for downloading the Inquiry from the BBC World Service. |
| 0:04.1 | We're a weekly program. Our job is to add in-depth analysis to one question from the |
| 0:09.9 | news. We hope you like it. |
| 0:19.0 | BBC World Service, this is Linda You with the inquiry. This week, should governments drop money out of helicopters? |
| 0:27.0 | Imagine waking up one morning to the sound of this overhead. |
| 0:41.0 | You look out and see that packages are being dropped in front of the homes of everyone on your street. |
| 0:50.0 | You race downstairs and tear up in your package. Inside, $10,000 in crisp new bills. A gift of freshly printed money from your government. No strings attached. |
| 0:55.0 | It's a crazy sounding idea, but one that is being proposed by economists. |
| 1:02.0 | They hope you'll go out and spend it and that |
| 1:06.8 | your spending will help kick-start the rich economies which many fear are |
| 1:11.3 | grinding to a complete hold. |
| 1:15.0 | Since the 2008 financial crisis, |
| 1:20.0 | incomes and wages have hardly grown in the US and UK and unemployment remained |
| 1:26.1 | stubbornly high in Europe. The European Central Bank has just announced more |
| 1:30.8 | support for the economy. |
| 1:33.0 | But investors and our expert witnesses don't think it's enough. |
| 1:39.0 | So, new ideas are needed. |
| 1:43.0 | Could helicopter money work? |
| 1:49.0 | Part one, the problem. |
| 2:07.0 | Well, first of all, I moved to Japan 31 years ago, so it was 1984, and I was an economist at the Federal Reserve Bank of New York at that time. Our first expert witness spoke to us from an advanced economy, Japan, which has struggled to grow for decades. |
| 2:18.0 | Richard Koo is chief economist at Nemora and has advised the Japanese government. |
| 2:24.0 | He explains why all advanced economies face slowing growth. |
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