3 ms·
QE is revenue neutral or positive. They buy an asset with created cash, and sell it later for a small profit. Helicopter money is revenue negative and the cre
by nostromo 7y ago
QE is revenue neutral or positive. They buy an asset with created cash, and sell it later for a small profit.
Helicopter money is revenue negative and the created cash cannot be recovered.
- dredmorbius 7y agoSure it can: tax it out of existence. Or apply deflationary monetary policy; braise interest rates, increase reserve requirements, or sell bonds.
- burroisolator 7y agoQE is revenue neutral in theory just like helicopter money along with taxing that same amount back on a future date is revenue neutral in theory. In practice it is more like "buy $4 trillion worth of assets with created cash and never be able to sell it for fear of creating a liquidity crisis": https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL.
- bcrosby95 7y agoAnd they buy assets at whatever price is required for the financial institution to remain solvent. At least, that's what happened during the mortgage meltdown.
- deleted 7y ago[deleted]