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Publication . Article . Preprint . 2022 . Embargo end date: 01 Jan 2022

Pandemic Recession and Helicopter Money: Venice, 1629--1631

Donato Masciandaro; Charles Goodhart; Stefano Ugolini;
Open Access
International audience; We analyse the money-financed fiscal stimulus implemented in Venice during the famine and plague of 1629–31, which was equivalent to a ‘net-worth helicopter money’ strategy – a monetary expansion generating losses to the issuer. We argue that the strategy aimed at reconciling the need to subsidize inhabitants suffering from containment policies with the desire to prevent an increase in long-term government debt, but it generated much monetary instability and had to be quickly reversed. This episode highlights the redistributive implications of the design of macroeconomic policies and the role of political economy factors in determining such designs.

General Economics (econ.GN), General Finance (q-fin.GN), FOS: Economics and business, Economics - General Economics, Quantitative Finance - General Finance, Finance, History, Monetary policy, Helicopter money, Pandemic, Venice 1629-1631, JEL: N - Economic History/N.N1 - Macroeconomics and Monetary Economics • Industrial Structure • Growth • Fluctuations, JEL: N - Economic History/N.N2 - Financial Markets and Institutions, JEL: E - Macroeconomics and Monetary Economics/E.E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit, JEL: E - Macroeconomics and Monetary Economics/E.E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook, JEL: D - Microeconomics/D.D7 - Analysis of Collective Decision-Making, [SHS.ECO]Humanities and Social Sciences/Economics and Finance, [SHS.HIST]Humanities and Social Sciences/History, [QFIN.GN]Quantitative Finance [q-fin]/General Finance [q-fin.GN]

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