Helicopter money's three roadblocks: Politics, hyper-inflation and productivity

Emiel van den Heiligenberg, head of asset allocation at LGIM, takes a closer look at the remaining options for global central banks.

Deflation risks are a real danger to global economies, presently. So far, the European Central Bank (ECB) and Mario Draghi's "whatever it takes" mantra has been enough to underpin global equity markets. However, this might all change if investors lose faith in the ability of central banks to create nominal growth. The BoJ got a serious nosebleed in terms of market credibility when its latest bazooka backfired. By cutting interest rates below zero in January, it had hoped to stimulate financial conditions. Instead, investors feared the feedback loop between negative rates, lower bank p...