Helicopter money should not be used on a long-term basis

Helicopter money is the financing via money creation of income transfers to economic agents. In the short term, helicopter money stimulates activity without driving up interest rates (or not by much), by giving rise to significant additional savings. This then prevent external deficits. But in the long term, continuing helicopter money when production has returned to the level of potential production does lead to higher interest rates, exchange rate appreciation, an external deficit and higher prices. So helicopter money should merely be an emergency policy, to be used during crises and not permanently .