Chapter 13 Outline

Chapter 13 Outline - Department of Economics South Dakota...

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Unformatted text preview: Department of Economics South Dakota State University Chapter 13: Multiple Deposit Creation and the Money Supply Process Econ 330: Money and Banking Fall 2007 Prof. Joseph Santos This outline draws from Frederic Mishkins Money, Banking and Financial Markets (2007) and, as such, contains copy written material. Please do not quote without proper citation. Department of Economics South Dakota State University [1] Four Players in the Money Supply Process The Federal Reserve System Banks Depositors Borrowers Of the four players, the Fed is the most important. The Feds conduct of monetary policy involves actions that affect its balance sheet. [1] Four Players in the Money Supply Process [2] The Feds Balance Sheet [3] Open Market Operations and the Monetary Base [4] An Open Market Purchase from a Bank [5] Discount Loans and the Monetary Base [6] Other Factors and the Monetary Base [7] Multiple Deposit Creation: A Simple Model This outline draws from Frederic Mishkins Money, Banking and Financial Markets (2007) and, as such, contains copy written material. Please do not quote without proper citation. Department of Economics South Dakota State University [2] The Feds Balance Sheet Select Liabilities Currency in circulation (in the hands of the non-bank public) and reserves are often referred to as the monetary liabilities of the Fed. Reserves consist of deposits at the Fed plus currency that is physically held by banks (called vault cash). Total reserves can be divided into required and excess....
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Chapter 13 Outline - Department of Economics South Dakota...

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