巴德 宏观经济学原理（英文版·第8版）Chapter 11 Eye Ons.pptxVIP

10EYE ONSThe Monetary System During the Great Depression, many banks failed, bank deposits were destroyed, and the quantity of money crashed by 25 percent.Most economists believe that it was these events that turned an ordinary recession in 1929 into a deep and decade-long depression.Figure 1 on the next slide shows what the Fed did to avoid another great depression. The Fed pumped reserves into the banking system.During the months after Lehman Brothers collapsed, using QE1 the Fed doubled the monetary base.In 2010 and 2011, QE2 took the monetary base to more than 3 times its pre-crisis level. In 2012 and 2013, QE3 took the monetary base to more than 4 times its normal level. This extraordinary increase in the monetary base did not bring a similar increase in the quantity if money.Figure 2 on the next slide shows the reason. The currency drain ratio (ratio of currency to M2 deposits) remained steady. In 2008, banks’ desired reserve ratio increased tenfold from 1.2 to 12 percent. The money multiplier collapsed from its normal value of 9 to 5. The surge in the desired reserve ratio is the sole reason for the collapse of the money multiplier.The collapse of Lehman signaled to banks that they faced high risk.Banks responded by boosting their desired reserve ratio. As the risk faced by banks returns to normal, the desired reserve ratio will fall.When this happens, the Fed will need to decrease the monetary base or face an explosion in the quantity of money. Because gold is valuable and easy to steal, goldsmiths in sixteenth century Europe had well-guarded safes in which people “deposited” their gold. The goldsmiths issued gold receipts entitling owners to reclaim their “deposits” on demand.To make a purchase of land from Henry, Isabella who has a receipt for 100 ounces of gold deposited with Samuel Goldsmith, could pay for the land in one of two ways: 1. She could collect her gold and hand the gold to Henry.2. She can give Henry her gold receipt. It is a simpler and s