The Money Supply and the Money Multiplier before and after the Financial Crisis
Date Issued
2012
Date
2012
Author(s)
Wu, Hua-Ling
Abstract
During the period of the global financial crisis, the trend of the money supply, money base and multiplier between European ,American areas and Asia areas were quite different. The money multipliers dropped dramatically in European and American areas, but in contrast, they went down moderately in Asia. That is so interesting that I analyze it by comparing eight areas and five variables, and adopting the method “contribution rate”.
Contribution rate would make us see more presicely how much the reserve rate and the currency ratio affect the change of the multiplier.
In this thesis, I apply the line charts to express the change of the money supply, money multiplier, reserve ratio and currency ratio. The100% stacked column charts are employed to present the contribution rate.
The result shows that the main reason why the multiplier descended a lot in European and American areas is because their reserve ratio ascends quite a lot. However in Asia, the multiplier fell gently since their reserve ratio rose mildly and the currency ratio went up a little.
Subjects
financial crisis
money supply
money multiplier
contribution rate
Type
thesis
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