Table of Contents
- About the Authors
- Money, Banking, and Your World
- The Financial System
- Interest Rates
- The Economics of Interest-Rate Fluctuations
- The Economics of Interest-Rate Spreads and Yield Curves
- Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities
- Financial Structure, Transaction Costs, and Asymmetric Information
- Bank Management
- Innovation and Structure in Banking and Finance
- The Economics of Financial Regulation
- The Financial Crisis of 2007–2008
- Central Bank Form and Function
- The Money Supply Process
- The Money Supply and the Money Multiplier
- Monetary Policy Tools
- Monetary Policy Targets and Goals
- Foreign Exchange
- International Monetary Regimes
- Money Demand
- IS-LM in Action
- Aggregate Supply and Demand, the Growth Diamond, and Financial Shocks
- Monetary Policy Transmission Mechanisms
- Inflation and Money
- Rational Expectations Redux: Monetary Policy Implications
Money and Banking, v. 1.0
by Robert E. Wright and Vincenzo Quadrini
Chapter 14 The Money Supply Process
By the end of this chapter, students should be able to:
- Describe who determines the money supply.
- Explain how the central bank’s balance sheet differs from the balance sheets of commercial banks and other depository institutions.
- Define the monetary base and explain its importance.
- Define open market operations and explain how they affect the monetary base.
- Describe the multiple deposit creation process.
- Define the simple deposit multiplier and explain its information content.
- List and explain the two major limitations or assumptions of the simple deposit multiplier.