【PPT精品课件】货币金融学7版英文课件--16-大学课件2.ppt

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1、Chapter 16Determinants of the Money Supply 2005 Pearson Education Canada Inc.The Simple Deposit Multiplier from Chapter 15Simple Deposit Multiplier1 D=RrDeriving the formulaR=DR=r D1D=Rr1 D=Rr2 2005 Pearson Education Canada Inc.Critique of the Simple ModelThe simple model of multiple deposit creatio

2、n shows how the Bank of Canada can control D by setting R.That simple model however,ignores 1.the publics decisions regarding how much C to hold,2.the banks decisions regarding the amount of R they wish to hold,and3.borrowers decisions on how much to borrow from banks.4.Recall also that the Bank of

3、Canada can exert more precise control over MB(=C+R)than over R.3 2005 Pearson Education Canada Inc.The Money Supply ModelBecause the Bank of Canada can exert more precise control over MB than it can over R,in Chapter 16 we derive a multiplicative relation between M and MB,M=m MB,where m is the money

4、 multiplier.m relates the change in M to a given change in MB.4 2005 Pearson Education Canada Inc.M=m MBDeriving Money MultiplierR=DRDR=r DR=(r D)Adding C to both sidesR+C=MB=C+(r D)1.Tells us amount of MB needed support D and C2.An extra$1 of MB that arises from an extra$1 of C does not support any

5、 additional D.That is,the C component of MB does not lead to a multiple deposit creation as the R component does.Money Multiplier5 2005 Pearson Education Canada Inc.To put it differently,An in MB that goes into C is not multiplied,whereas an that goes into supporting deposits is multiplied.We haveMB

6、=C+(r D)To deal with currency drains,we also assume thatC=c Dwhere c is the currency ratio.Hence,MB=(c D)+(r D)=(c+r)D(Continued)6 2005 Pearson Education Canada Inc.M =(c D)+D =(1+c)Dm 0,there is a positive relation between M and each of MBn and A.(Continued)11 2005 Pearson Education Canada Inc.M=m

7、(MBn+A)Open market purchases MBn and for given c,r,and A lead to an in M.Open market sales MBn and for given c,r,and A lead to a in M.Hence M is positively related to MBn.For given MBn,c,and r,an in A will MB and lead to a multiple in M.For given MBn,c,and r,an in A will MB and lead to a multiple in

8、 M.Hence M is positively related to A.Overview of the Money Supply Process12 2005 Pearson Education Canada Inc.Factors Determining Money Supply13 2005 Pearson Education Canada Inc.Lets use the money supply model to explain the collapse in the U.S.during the Great Depression,1930-1933.Between October

9、 1930 and March 1933 there were a number of bank failures in the U.S.For example,in the first bank crisis(from October 1930 to January 1931),256 banks failed in November 1930 with$180 million of deposits and another 532 banks failed in December 1930 with over$370 million of deposits.The most dramati

10、c failure was that of the Bank of the United States(with over$200 million in deposits)which many people associated with a central bank.Application:The Great Depression Bank Panics14 2005 Pearson Education Canada Inc.Deposits at Failed Banks:19293315 2005 Pearson Education Canada Inc.e,c:19293316 2005 Pearson Education Canada Inc.Money Supply and Monetary Base:19293317 2005 Pearson Education Canada Inc.