ECB Official Raps IMF’s ‘Helicopter Money’

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He’s right on this point. Functionally it is fiscal expansion, though not all that much as a percentage of world GDP.

The question is whether I’s warranted to support demand and how to decide which nations should get it:

ECB’s Stark raps move to boost IMF drawing rights

by Marc Jones

April 7 (International Business Times) — European Central Bank Executive Board member Juergen Stark was quoted on Tuesday as criticizing decisions made at the G20 summit to boost the IMF’s Special Drawing Rights (SDRs).

Stark suggested in a newspaper article that the decision was potentially inflationary as it would create “helicopter money” and that it had not been properly thought out.

Last week leaders from the Group of 20 wealthy and emerging economies agreed to support a general allocation of $250 billion worth of International Monetary Fund’s SDRs alongside other measures to boost the Fund’s firepower.

Countries hit particularly hard by the global economic crisis would be allowed to increase their SDR share by using those of another country which may not need them.

The results of the G20 summit have been broadly welcomed by policymakers by Stark questioned whether this decision was needed.

“That is pure money creation. That is helicopter money for the globe,” he was quoted as saying in an article in German business daily Handelsblatt.

“There was no examination of whether there is a global need for additional liquidity at all… One used to take a lot of time to examine something like this,” he said.