【PPT精品课件】货币金融学7版英文课件--16-大学课件2.pptx

;The Simple Deposit Multiplier from Chapter 15;Critique of the Simple Model;The Money Supply Model;M = m ? MB Deriving Money Multiplier R = DR DR = r ? D R = (r ? D) Adding C to both sides R + C = MB = C + (r ? D) 1. Tells us amount of MB needed support D and C 2. An extra $1 of MB that arises from an extra $1 of C does not support any additional D. That is, the C component of MB does not lead to a multiple deposit creation as the R component does. ;To put it differently, An ? in MB that goes into C is not multiplied, whereas an ? that goes into supporting deposits is multiplied. We have MB = C + (r ? D) To deal with currency drains, we also assume that C = c ? D where c is the currency ratio. Hence, MB = (c ? D) + (r ? D) = (c + r ) ? D; M = (c ??D) + D = (1 + c) ??D m 1/r because no multiple expansion for currency and because as D ? ER ?;r = 5% C = $40 billion D = $160 billion M (= M1+) = C + D = $200 billion The money multiplier tells us that given the behavior of the public as represented by c = 0.25 and that of banks as represented by r = 5%, a $1 ? in MB will lead to a $4.2 ? in M. If c = 0 (no currency drains), then m = 20 . ;Also notice that This is the deposit multiplier when c = 25% and r = 5%. It tells us that given the behavior of the public as represented by c = 25% and that of banks as represented by r = 5%, a $1 ? in MB will lead to a $3.3 ? in D. ;So far we have been assuming that the Bank has complete control over MB. This is not the case. The Bank lacks complete control over MB because it cannot unilaterally determine the amount of borrowing by banks from the Bank. Here we split MB into two components: nonborrowed monetary base (MBn). This component of the MB is directly under the Bank’s control because it results from open market operations. borrowed monetary base (or advances A). This is the less tightly controlled component of the base, because it is influenced by banks’ decisions. ;Hence, MB = MBn + A T