Chapter 4. Money .

Parts of Chapter 4 in the previous edition are now in Chapter 5 of the eighth edition

Homework p. 100, # 2, 4

Link to syllabus

Table 4-1 p. 86. The Measures of Money

The Federal Reserve System. Other Text

OMC Meeting (early 2012?)

Open Market Committee Seating

RollerCoaster joke

GreenspanJoke

The Monetary Base and the Money Supply. (intro text)

How Banks Create Money. (Intro text)New Loans Total(this Newstage) Loans

900 900

810 1,710

Fourth stage 729 2,629 3,439 729 2 ,439

Reserve Requirements, US, 2006. (different intro text).

If reserve requirements are small, the money multiplier is large – except that people keep cash.

Figure 4-1, p. 95 Quantitative Easing

Point is that the increase in the monetary base has not led to highermoney supply, nor to inflation, because banks have accumulated excess reserves, because private sector hasn’t borrowed.

Source: Fed of St. Louis: Monetary Trends (Sept. 2012)

Excess Reserves

Table 4.2 p. 97 The Money Supply and its Determinants,

1929 and 1933.