New Delhi, Nov. 18 -- What happens when a helicopter drops a large amount of cash on a local economy? Does the local GDP go up instantly? Of course not. Even a schoolkid's intuition tells you that the immediate result would be inflation. It is more money chasing the same amount of goods and services.

Such a 'helicopter drop' of cash fresh off the printing press is used as an unconventional and last-resort tool for a situation of extreme economic distress, such as a deep recession or liquidity trap. It is used after conventional monetary solutions like lowering interest rates to zero or making bond purchases have failed.

Such a cash infusion means people receive 'free' money, with no associated debt or future tax burden, so that they can...