Multiple Deposit Creation Process

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Table of Contents

Four Players in the Ms Process

Multiple Deposit Creation Process

Overview of the next set of lectures

Basic overview of the Fed

Questions we will answer

Questions we will answer (cont.)

Money Creation Process

Fed Balance Sheet (simplified)

How does the Fed change reserves?

Balance sheet of a commercial bank (simplified)

Open Market Operations

Discount Loans

How does an increase in reserves create deposits?

Deposit Creation Process (cont.)

Multiple Deposit Creation

Formula for multiple deposit creation

The multiple deposit creation story

Extensions to the model

Deposit Creation: Single Bank

Deposit Creation: Banking System

Deposit Creation

Deposit Multiplier

Deposit Multiplier

 

 

Author: Edward McPhail