Why printing money is the simplest way to fund aid

When the financial crisis hit, aid payments were also affected and targets for global aid seemed unreachable.

When financier Michael Metcalfe’s daughter suggested printing money for aid, he initially dismissed it thinking it would simply drive inflation higher. Then one day it came to him that together the central banks of the U.S., U.K. and Japan had increased the stock of money in their economies by $3.7 trillion to save the world from the financial crisis – without driving inflation up.

In his TED talk, Michael asks why these same banks could not create a little bit more for overseas aid. His idea is that, provided they see little inflation risk from doing so, the central banks could be mandated to match governments’ overseas aid payments up to a certain limit. The extra dollars for aid would have a minimal affect on the country of origin – it would not be spent in that country, hence not impact inflation – but would bring huge benefits to the countries in receipt.

Is printing money the simple answer to the current aid payment crisis?