Printing money only helps the poor if the cash is handed out to everyone at the exact same time.
The Cantillon effect reveals that the people closest to the source of new money benefit while others suffer from rising prices. Monetary expansion often fails to erode the debt of the poor because the resulting inflation happens asymmetrically. Many economists assume that stimulus programs and low interest rates are a net positive for lower-income households. This research proves that those gains are often offset by the structural way money flows through the banking system. Real wealth redistribution requires more than just increasing the money supply.
HANK After Cantillon: Two Hidden Premises and a Breakeven Condition
SSRN · 6704238
<p>The Heterogeneous Agent New Keynesian (HANK) literature claims that unanticipated monetary expansions benefit the poor by eroding their nominal debt — the balance-sheet channel. This claim rests on two premises built into the standard framework by construction: that new money reaches all agents simultaneously, and in equal proportion. Both exclude the Cantillon effect — the permanent redistribution from late to early recipients when money enters at a specific point and propagates with a lag.