1. M = m  MB (Money Supply = multiplier x Monetary Base,
Money Multiplier
M = m  MB (Money Supply = multiplier x Monetary Base,
where MB = Currency + Reserves)
Deriving Money Multiplier
R = RR + ER , (Reserves = Req. Res. + Excess Res.)
RR = r  D, (Req. Res. = reserve ratio x Deposits)
R = (r  D) + ER
Adding C to both sides
e=ER/D, c = C/D, assuming proportionality of ER & C vs. D
R + C = MB = (r  D) + ER + C
1. Tells us amount of MB needed support D, ER and C
2. $1 of MB in ER, not support D or C
MB = (r  D) + (e  D) + (c D)
= (r + e + c)  D

2. 1
D =  MB
r + e + c
M = D + (c D ) = (1 + c) D
1 + c
M =  MB
m =
m < 1/r because no multiple expansion for currency and because as D  ER 
Changes dm/dc, dm/de, dm/dr?
Full Model
M = m  (MBn + DL), where MBn is non-borrowed MB and DL are discount loans

3. Excess Reserves Ratio Determinants of e
1. i , relative Re on ER  (opportunity cost ), e 
2. Expected deposit outflows, ER insurance worth more, e 

4. Factors Determining Money Supply

5. Money Supply

6. Determinants of the Money Supply

7. Deposits at Failed Banks: 1929–33

8. e, c: 1929–33

9. Money Supply and Monetary Base: 1929–33