Debt monetization

Debt monetization or monetary financing is the practice of a government borrowing money from the central bank to finance public spending instead of selling bonds to the private sector or raising taxes. It is often informally and pejoratively called printing money[1] or money creation. This practice is generally prohibited in many countries, because it is considered dangerous due to the risk of creating runaway inflation.

However current central bank policies in responses to the COVID-19 pandemic (such as quantitative easing) are considered to be very similar to debt monetization, although with subtle and important nuances.