Charles A. E. Goodhart, Donato Masciandaro, Stefano Ugolini: Pandemic recession, helicopter money and central banking: Venice, 1630, in: CEPR discussion paper series, Discussion Paper No. 15715, London, January 2021.
This paper analyses the monetary policy that the Most Serene Republic of Venice implemented in the years of calamities using a modern equivalent of helicopter money, precisely an extraordinary money issuing, coupled with capital losses for the issuer.The authors consider the 1629 famine and the 1630-1631 plague as a negative macroeconomic shock that the incumbent government addressed using fiscal monetization. Consolidating the balance sheets of the Mint and of the Giro Bank, and having heterogenous citizens – inequality matters – they show that the Republic implemented what was, in effect, helicopter money driven by political economy reasons, in order to avoid popular riots.
Link to the article on the site of the Centre for Economic Policy Research (CEPR)