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The Determinants of the Money Multiplier in the United Kingdom

Michael Beenstock ()

Journal of Money, Credit and Banking, 1989, vol. 21, issue 4, 464-80

Abstract: An econometric model for the U.K. money (LM3) multiplier is estimated from annual data on the postwar period. The model consists of three behavioral equations: (1) the currency ratio in which the demand for currency varies inversely with interest rates on demand deposits; (2) a time deposit ratio in which the demand for time deposits varies inversely with the differential rates of interest and; (3) a bank reserve ratio in which the demand for reserves varies inversely with interest rates. The model is used to calculate dynamic multipliers and counterfactual simulations for financial innovations of the 1970s. Copyright 1989 by Ohio State University Press.

Date: 1989
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Working Paper: The Determinants of the Money Multiplier in the United Kingdom (1986) Downloads
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