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Simple Analytics of the Money Supply Process and Monetary Control

1982; Federal Reserve Bank of St. Louis; Volume: 64; Linguagem: Inglês

10.20955/r.64.22-39.mmx

2163-4505

Daniel L. Thornton,

Economic Theory and Policy

A Simple Linear Model of the Money Stock Equations Definitions of Variables: Money Supply Equations M' Ihe supply ot nominal money, composed of checkabte deposits and currency M, D.c. 0 checkablc deposits of depository mstilutions B. RR. -.ER C the currency component of money C KD, pi.tJ~1.K 0 p 0 B tne monetary ease TO ~D p~U.. 7 0. p 0 AR requireo reserves of depository institutions ER eD~-oi~u.e 0. ~0 ID lime and savings aeposits of deposilory institutions AR. r(O -10,1 ER excess reserves of depository inslitutions AR, .ER, NBA, .BR. NBA nonborrowed reserves, total reserves of depository institulions less depository instituttons' borrowing from BR. -idid.i.) ' On.. 'X -0 the Federal Reserve Money Demand Equations BR depasilory institutions borrowing from the Federa Reserve M;' i~Y.. u-.-.h 0 A 0 i the nominal market irilerest rate Market Equilibrium condition 0 the discount rate M~M~M.V nominal GNP Mci the demand for nomina.money M tne equilibrium nominal money stock U,.U,.. random variables with zero means ano constanl u,,.a, vanances U-.. Descriptions of Equations.