A columnist in the New York Times noted, “Normally when we say that a central bank like the Federal Reserve or European Central Bank creates money from thin air, it does so by buying up bonds.” How...

A columnist in the New York Times noted, “Normally when

we say that a central bank like the Federal Reserve or European Central Bank creates money from thin air, it does

so by buying up bonds.” How can a central bank “create

money” by buying bonds? Doesn’t the government create

money by printing currency? Briefly explain.

Source: Neil Irwin, “Helicopter Money: Why Some Economists Are

Talking about Dropping Money from the Sky,” New York Times,

July 28, 2016.