IMF keeps door open to 'helicopter money' to stave off Covid-19 slump

Christine Lagarde, President of the European Central Bank (ECB). Photo: Getty

The IMF is keeping the door open for governments to pay people directly to prevent the Covid-19 slump becoming something much worse by recommending low-income households get money before unemployment gets a grip on economies.

In a blog post, staffers John Bluedorn and Wenjie Chen said that the Great Lockdown -- the IMF’s term for the Covid-19 fallout that has sent many economies reeling -- has shown the limits of central bank monetary policy of  cutting interest rates because rates were in many places close to zero going into the pandemic.