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Combatting Eurozone Deflation

27 Jan 2015

John Muelbauer argues not just for quantitative easing, but "helicopter money" to fight Eurozone deflation.
 
Writing in VoxEU.org, INET Oxford's John Muelbauer observes that Eurozone deflation is likely to become reality when the annual inflation figure for 2014 is announced in January. Muelbauer's column argues that the ECB should develop a strategy that works in the Eurozone’s unique financial setting, instead of simply following the Fed’s lead. The author proposes that the ECB should pursue ‘quantitative easing for the people’, such as sending each adult citizen a €500 cheque, a strategy sometimes known as "helicopter money".  The article, which is based on academic work by the author and two economists from the German Bundesbank, was the most read piece on VoxEU this past month.  Click here for a link to the article.