Central banks have welcomed the news about a recent COVID-19 vaccine breakthrough. However, implementation risks remain on vaccines, and a more flexible policy armory may still be required because monetary policy initiatives, since the COVID-19 crisis, have closely followed the GFC playbook.
Policymakers have eschewed direct, money-financed, fiscal stimulus, or “helicopter money” (HM), involving direct purchase of central government debt. Instead, central banks have either expanded purchases of government and corporate bonds in the secondary market, or broadened corporate loan programs.
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