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Pandemic Recession, Helicopter Money and Central Banking: Venice, 1630

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  • Goodhart, Charles
  • Masciandaro, Donato
  • Ugolini, Stefano
Abstract
This paper analyses the monetary policy that the Most Serene Republic of Venice implemented in the years of calamities using a modern equivalent of helicopter money, precisely an extraordinary money issuing, coupled with capital losses for the issuer. We consider the 1629 famine and the 1630-1631 plague as a negative macroeconomic shock that the incumbent government addressed using fiscal monetization. Consolidating the balance sheets of the Mint and of the Giro Bank, and having heterogenous citizens – inequality matters - we show that the Republic implemented what was, in effect, helicopter money driven by political economy reasons, in order to avoid popular riots.

Suggested Citation

  • Goodhart, Charles & Masciandaro, Donato & Ugolini, Stefano, 2021. "Pandemic Recession, Helicopter Money and Central Banking: Venice, 1630," CEPR Discussion Papers 15715, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:15715
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    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Policy responses > Macroeconomic
    2. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Health > Immunization

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    Cited by:

    1. Pierpaolo Benigno & Salvatore Nisticò, 2020. "The Economics of Helicopter Money," Working Papers CASMEF 2001, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    2. Rania Adel Al-Bawwab, 2022. "The zecca mint: a self-enforcing monetary constitution in historic venice," Economics of Governance, Springer, vol. 23(1), pages 1-15, March.
    3. Temperini, Jacopo & D'Ippoliti, Carlo & Gobbi, Lucio, 2024. "Is the time ripe for helicopter money? Growth impact and financial stability risks of outright monetary transfers," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 24-36.
    4. Donato Masciandaro & Davide Romelli & Stefano Ugolini, 2023. "Fiscal Dominance, Monetary Policy and Exchange Rates: Lessons from Early-Modern Venice," BAFFI CAREFIN Working Papers 23205, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.

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    More about this item

    Keywords

    Monetary policy; Central banking; Helicopter money; Pandemic; Venice 1630;
    All these keywords.

    JEL classification:

    • N2 - Economic History - - Financial Markets and Institutions
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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