Deposit Creation: Rounds, Leaks and the Money Multiplier
This lesson is part of the course
In this lesson
You follow a new deposit through ten rounds of lending, add up the money created, find the limit of the geometric series with two leaks and compute the money multiplier from real-looking banking statistics.
Buy the course once for $9.99 to unlock every lesson and lab, the final exam and the certificate – lifetime access, no subscription.
Lessons in this course
- Counting Money: Currency, Deposits and the Aggregates M1 to M3 Locked
- Deposit Creation: Rounds, Leaks and the Money Multiplier Locked
- The Quantity Equation: MV = PY, Velocity and Implied Inflation Locked
- A Rule-Based Policy Rate: Inflation Gap, Output Gap and the Deviation Locked
- Policy Stance: Real Rates, the Neutral Rate and Tight vs Loose with IFS Locked
- The Central Bank Balance Sheet: Asset Purchases, Reserves and Bank Liquidity Locked
- Seigniorage and the Inflation Tax in a Simple Steady State Locked
- Inflation-Target Scorecard: 12-Month Inflation, the Band and the Chart Locked