kzeise.com

We currently have a problem in the Euro area with too low inflation, also caused by deflationary policy goals with regard to Greece. What we seem to forget is that money is an illusion, a carefully orchestrated one that mainly works by keeping the supply limited. When we have a deflation caused by technological change, we cannot count on the traditional means to inflate, since with interest rates already at zero the extra money will not be used to found extra investment, it will merely fuel asset price bubbles. So we need a different way, to get the money to people actually willing to spend it. The best way would be to literally print money, and give everyone money directly. 500€ would be a good start, roughly 1% to 1.5% of GDP per capita. This would send a very strong message that one is serious about restarting inflation, while limiting the instrument to situations where inflation is below 0.5% would reassure investors that printing money would not become a habit.