How “Monetization” Really Works—Examples from Nations’ Policy Responses to COVID-19
This paper explains why "monetization"—commonly equated with "printing money"—is operationally impossible and why inflationary concerns are misplaced, drawing on coronavirus disease (COVID-19) policy responses of selected countries.
COVID-19 has forced governments to provide stimulus packages amid falling tax revenues, prompting debate on "monetization" of government debt. This paper argues that monetization does not occur as often described. It discusses examples of central bank operations and accounting in the People’s Republic of China, the Philippines, Singapore, and the United States during the first half of 2020.
- Central Bank Operations and Government Debt
- The Bangko Sentral ng Pilipinas and Failed Treasury Auctions in March
- The Monetary Authority of Singapore and the Government's Drawdown of Reserves
- Monetization Debate in the People's Republic of China
- The Federal Reserve and the CARES Act