August 15, 2019

IT'S A DEFLATIONARY EPOCH:

BlackRock's Hildebrand Tells Europe Cash Handouts Should Be Next (Carolynn Look  and Francine Lacqua, August 15, 2019, Bloomberg)

The world's largest asset manager says European authorities should consider funneling money straight to households and businesses if the current economic slowdown worsens.

As global central banks exhaust the impact of more traditional tools -- interest rates and asset purchases -- "the next step needs to be more than just more of the same," BlackRock Vice Chairman Philipp Hildebrand said in a Bloomberg TV interview.

He added that the euro area would likely be the first major economy to see radical measures such as "putting money directly in the pockets of consumers or corporates."

That's a concept often referred to as "helicopter money," which Nobel Prize-winning economist Milton Friedman came up with in the late 1960s. Hildebrand shrugged the term off as "sort of a catch phrase," arguing that central banks simply need to pick a different approach.

"The obvious one is the European Central Bank because they are closest at the point where more of the same simply won't work anymore," said Hildebrand, who was president of the Swiss National Bank from 2010 to 2012.

Just don't call it UBI.

Posted by at August 15, 2019 7:48 AM

  

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