In March 2020, the COVID-19 pandemic rocked economies worldwide. Millions of people lost their jobs, and many businesses struggled to survive or shut down. Governments responded with some of the largest economic relief packages in history— the US alone spent $2.2 trillion on a first round of relief. So where did all this money come from? Jonathan Smith explores the strategy of quantitative easing. [Directed by Serin İnan, Kozmonot Animation Studio, narrated by Addison Anderson, music by Deniz Doğançay].

Jonathan Smith: How do governments create money out of thin air?

How do governments create money out of thin air?

In 2020, injecting cash via bond purchases, central banks aimed to stabilize economies without triggering high inflation.

Quantitative easing, used during financial crises, involves central banks creating money to buy bonds, stimulating the economy.

Concerns rise as central bank bond purchases could allow governments to sidestep debt, challenging economic safety nets.