ECN 481 (10), Determinants of Multiplier Components

ECN 481 (10), Determinants of Multiplier Components -...

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Causes of Non-Fed Variables: M2 Determination Federal Reserve controlled variables: H NON (open market operations), r D , r T. This chapter -- studies key causes of k, t, mmmf, e, and DL.
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Key Causes of k = C/D Interest rates (i), i k Bank Panics, Panic k Illegal Activity, increases the demand for cash Financial Innovation towards transactions convenience (e.g. credit cards) (FI), FI k
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Key Causes of t = T/D Interest rates (i), i t Market Risk (Stock) ( σ S ), σ S t Uncertainty About the Economy ( σ Y ), σ Y t Sweep Programs (SWEEP), SWEEP t
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Key Causes of mmmf = MMMF/D Interest rates (i), i mmmf Market Risk (Stock) ( σ S ), σ S mmmf Uncertainty About the Economy ( σ Y ), σ Y mmmf
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Key Causes of e = ER/D Interest rates (i), i e Expected Deposit Outflows (DOE) DOE k Deposit Risk, or Uncertainty About Deposit Outflows ( σ D ) σ D e
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This note was uploaded on 08/09/2009 for the course ECN 481 taught by Professor Dutkowsky,d during the Summer '08 term at Syracuse.

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ECN 481 (10), Determinants of Multiplier Components -...

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