Copyright© 2008 South-Western, a part of Cengage Learning.. Copyright© 2008 South-Western, a part of Cengage Learning.. Copyright© 2008 South-Western, a part of Cengage Learning.. Copyri
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Who Controls the Money Supply and How?
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Base
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Base Changes
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Monetary Base
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No Excess Reserves
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Securities that Central Banks Purchase Outright or Use for Repurchase Agreements: 2002
Source: Richard W Kopcke, "The Practice of Banking in Other Industrialized Countries,’’ New England
Economic Review, Second Quarter 2002, 6 Also available online at
http://www.bos.frb.org/economic/neer/neer2002/neer202a.pdf (accessed September 11, 2006).
*CG means central government.
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Market Intervention
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Changes
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Industrial Nations: 2002
Source: Richard W Kopcke, ‘‘The Practice of Banking in Other Industrialized Countries,’’ New England
Economic Review, Second Quarter 2002, 6 Also available online at http://www.bos.frb.org/economic/
neer/neer2002/neer202a.pdf (accessed September 11, 2006)
*MC means market ceiling It is the rate the central bank charges on a fixed-term loan MF means market floor
It is the deposit rate given on bank deposits at the central bank.
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1929 and 1932
Sources: AT&T Historic Stock Data, http://www.att.com/ir/ (accessed June 5, 2006); The Wall Street Journal,
‘‘New York Stock Exchange Transactions,’’ September 4, 1929, 32 (accessed through ProQuest, June 5, 2006);
The Wall Street Journal, ‘‘New York Stock Exchange Transactions,’’ December 31, 1932, 32 (accessed through
ProQuest, June 5, 2006).
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on the Money Multiplier or Monetary Base
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Assets: 2002
Source: Richard W Kopcke, ‘‘The Practice of Banking in Other Industrialized Countries,’’ New England
Economic Review, Second Quarter 2002, 7 Also available online at http://www.bos.frb.org/economic/
neer/neer2002/neer202a.pdf (accessed September 11, 2006).
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Change the Monetary Base
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Securities from Banks
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or Companies as Counterparties
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or from Governments
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Source: Federal Financial Institutions Examination Council, ‘‘Assets, Liabilities, and Net Worth of U.S.
Commercial Banks, Thrift Institutions and Credit Unions as of June 30, 2005,’’ 2005 Annual Report,
http://www.ffiec.gov/PDF/annrpt05.pdf, 21 (accessed September 11, 2006).
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Source: Board of Governors of the Federal Reserve System, Washington, D.C.,
http://www.federalreserve.gov/otherfrb.htm (accessed September 11, 2006).
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Source: Alberto Alesina and Lawrence H Summers, ‘‘Central Bank Independence and Macroeconomic
Performance: Some Comparative Evidence,’’ Journal of Money, Credit and Banking 25, no 2 (May 1993).
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Source: Alberto Alesina and Lawrence H Summers, ‘‘Central Bank Independence and Macroeconomic
Performance: Some Comparative Evidence,’’ Journal of Money, Credit and Banking, 25, no 2 (May 1993).
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around the World
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