Analyze the money supply mechanism with a general model of money supply determination, not 10 in the

Currency ** Amount = Currency Multiplier Base Currency = (Excess Reserve Ratio + 1) (Statutory Reserve Ratio + Excess Reserve Ratio + Cash - Deposit Ratio). Other words.

1.Reserve Requirements.

2. Excess reserve requirements.

3. Cash holdings.

4. Number of deposits.

All of them have a decisive effect on the amount of money.

The amount of base money is controlled by the first bank, and the treasury bonds of commercial banks are being repurchased. However, changes in the money supply are determined by the behavior of various economic agents in the economic system, such as the overheating of the economy, the public's preference and choice of assets, and the ability of other non-bank financial institutions to create deposits.

Money supply: The money supply agent is the behavior of banks in the modern economy to supply money to economic agents to meet their money needs.

Amount of money**: The amount of monetary assets held by the non-banking sector, i.e., the amount of money in circulation.

Since 1994, China has been divided into monetary levels, and according to the monetary level of monetary statistics, China's currency is currently divided into three levels, the specific content is as follows:

m0: cash in circulation.

M1: M0 + cheque ready deposit.

M2: M1 + fixed deposit of enterprise units + savings deposit of urban and rural residents + customer margin deposit of ** company + other deposits.

I wrote it, and there was no derivation process.

r--- statutory reserve ratio for spring payments.

c--- Cash in circulation.

d--- Cheques, deposits.

ER --- excess reserves.

m --- money supply.

Cash ratio c = c d

Excess reserve ratio e=er d

Currency multiplier. m=(1+c)/(r+e+c)

Money supply m=m(mb+br).

Among them, MB is the non-borrowed base currency, that is, the currency change caused by the central bank's open market buying and selling of bonds, and BR is the borrowed reserve, that is, the increase or decrease of the reserve caused by the central bank providing discount loans, and the money supply model has been demonstrated.

The basic modular type of modern money supply is ms = b m where ms is the amount of money, baib is the base money zhi, and m is the money multiplier.

There are three main characteristics of the money supply process:

1) The main body that forms the money supply is the ** bank and the deposit money bank with commercial banks as the main body (including the depository financial institutions that accept demand deposits), that is, the secondary banking system.

2) The two entities each create the corresponding money, the first bank to source and create the base money, and the commercial bank to expand and create the deposit money, thus forming a two-tier money supply mechanism of "originating from flow".

3) The process of money supply in the banking system must meet three basic conditions: first, the implementation of complete credit money circulation, that is, there is no metal currency and national paper money (currency directly issued by **) in circulation; the second is to implement a proportional deposit reserve system; The third is the widespread use of non-cash settlement.

Features of the general theoretical model of monetary analysis:

1) The elasticity of real money demand to real income is.

back to 1; (2) The nominal interest rate is equal to.

Answer: The sum of the expected real interest rate and the expected rate of change, the market interest rate is maintained by the expectations of speculators;

3) the difference between the expected real interest rate and the long-term real growth rate is determined by external forces;

4) Nominal money demand can be adjusted in a timely and sufficient manner to changes in money supply.

The money supply mechanism of the market economy is a two-level money creation system.

First, the level of creation of deposit money is realized by the decentralized decision-making of deposit money banks and their self-restraint mechanism;

The second is the creation of base money, which is realized by the centralized decision-making and macroeconomic regulation and control of the bank.

There are two main aspects of the formation mechanism of money supply:

1) The main body of money supply formation is ** banks and commercial banks (including financial institutions that accept demand deposits), that is, the deposit money banking system.

2) The two main books each create a corresponding currency: ** the bank creates cash, and the commercial bank creates the deposit currency. In real economic life, the money and loans provided by banks will generate deposits several times their size through several deposits, loans, and other activities, that is, what is commonly referred to as derivative deposits.

The size of the money multiplier determines the size of the money supply's ability to expand.

In these two links, bank deposits are the largest component of the money supply, but the basis for commercial banks to create deposit money is the base money provided by the bank, and it is always subject to the bank in the process of creation, so the bank has always been in the core position in the whole money supply process.