# PS 2-1 - compare with the actual figure calculated in question(c above Please provide your comments on the consequences of what you observe for

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Problem Set #2 *Econ S-1530 Due July 8 th , 2010 1. (40 points) Table 1 has a time series of H P , H B and the money stock multiplier for 1960-2009. For the purposes of this exercise, use M2 as money stock (i.e. M2 = M = D + H P ) a) Determine the money multiplier for the years 1960-2009. Does there seem to be any trend to the multiplier? c) Determine and for the years 1960, 1970, 1980 and 1990. Has there been a π β greater change in public behavior or in bank behavior? d) Determine the geometric average of the change in the multiplier per year for the years 2000-2007. If one assumed in 2008 and 2009 that the multiplier would continue to change at this rate each year, what would one have predicted the level of the multiplier to be in 2008 and 2009? How does this
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Unformatted text preview: compare with the actual figure calculated in question (c) above? Please provide your comments on the consequences of what you observe for 2008 and 2009. Table 1: year M2 Deposit Hp Hb 1960 315.3 286.0 29.3 12.6 1970 627.8 578.3 49.5 16.8 1980 1604.8 1487.4 117.4 27.1 1990 3290.4 3041.4 249.0 47.6 2000 4943.3 4407.7 535.6 54.4 2001 5462.7 4877.5 585.2 54.7 2002 5806.9 5176.7 630.2 56.0 2003 6093.1 5426.4 666.7 58.5 2004 6435.6 5733.2 702.4 62.3 2005 6695.5 5966.6 728.9 64.5 2006 7094.5 6340.0 754.5 63.9 2007 7522.2 6758.4 763.8 66.0 2008 8249.3 7430.6 818.7 840.5 2009 8549.7 7684.3 865.4 1156.5...
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## This note was uploaded on 10/21/2010 for the course ECON 1530 taught by Professor Ohly during the Spring '10 term at Dartmouth.

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