[zozbot234]

> You can’t create money without a demand for it first.

Why not? At the individual level it literally works the same as any purchase of existing assets. In practice, the counterparty of that transaction will probably spend that money in turn on something else that she actually planned to hold.

> This view derives from monetarist theory, it’d be fair to say this view enjoys less support today than it did in the past.

Well, the biggest flaw of monetarist theory is that it treats "the creation of money" as if it was somehow special, whereas what really matters is the product of money and velocity. (Velocity can be seen as a reflection of external changes in the demand for money balances. It also explains how money can seemingly be "created" out of thin air by entities other than the central bank; what we're really seeing in these expanded money measurements is higher velocity for the actual "high-powered" money that the central bank issues.)

[CraigJPerry]

> You can’t create money without a demand for it first

>> Why not?

To be clear i’m discounting stimulus checks which would be exactly that but it wouldn’t be right to claim this is a common source of money creation.

The most common source would be A commercial bank issues a loan creating new money, but without a customer demanding a loan, there is no ability to create money.

The second most common source would be the government spends into the economy by consuming on its own behalf - there needs to be something for sale in the economy (inc. labour / public sector employment).

[zozbot234]

Usually new money is created when the central bank issues it in exchange for government bonds. It's practically always possible to do this. You could posit a theoretical situation where government bonds are literally indistinguishable from money, but that just means that government bonds are money, so the government treasury has merged into the central bank. Then the central bank has to buy something else, which means it incurs some risk. Or the government can issue more government bonds. "Spending money in the economy" is like this, assuming that the government bonds are permanently rolled over, and never bought back in full.