Obtain Data On Currency Held By The Nonbank Public Which Is Called The Currency Comp 1658867

Obtain data on currency held by the nonbank public, which is called the currency component of M1 (starting in 1959). Define “deposits” for each year since 1959 to be M2 minus currency, and define “reserves” to be the monetary base minus currency. Calculate and graph the M2 money multiplier, the reserve–deposit ratio, and the currency–deposit ratio for the period since 1959. What is the trend in the money multiplier? How is this trend related to the trends in the reserve–deposit and currency– deposit ratios? Do you have any hypotheses about what factors underlie these trends?


Prof. Angela


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