Why the money multiplier has remained persistently so low in the post-crisis United States?

Autor:	Pierluigi Morelli, Elena Seghezza
Rok vydání:	2020
Předmět:	Economics and Econometrics 050208 finance education 05 social sciences Money multiplier Monetary economics Private sector Post crisis 0502 economics and business Excess reserves medicine Economics 050207 economics medicine.symptom health care economics and organizations Collapse (medical)
Zdroj:	Economic Modelling. 92:309-317
ISSN:	0264-9993
DOI:	10.1016/j.econmod.2020.01.010
Popis:	The money multiplier collapsed in the USA in the wake of the Lehman crisis, and since then it remained at particularly low levels. The main reason for this collapse is to be found in the significant increase in banks’ excess reserves and the modest increase in deposits. The weak growth of deposits resulted from a contained growth of loans. Most scholars attribute the latter to the low propensity of banks to grant credit. Using quarterly data for the period 1991–2017 we estimate a demand for loans by firms and households. We show that the modest increase in deposits and the persistence of low levels of the US money multiplier has been due to the weak demand for loans by the private sector.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_dedup___::fd68f4f8418bd1bba10722ea3f9a135e https://doi.org/10.1016/j.econmod.2020.01.010 Zobrazit plný text záznamu Full Text from ScienceDirect