Money Multiplier in India « Mostly Economics

English: Fractional reserve system, money mult...

English: Fractional reserve system, money multiplier example. Created with Calc based on the work of Analoguni Português: Gráfico explicativo sobre o sistema de reserva fracionada. (Photo credit: Wikipedia)


RBI releases a lot of data on monetary aggregates on a weekly basis. Though, analysing monetary data is not in fashion anymore, it does throw long term trends. Take the case of money multiplier (MM). It is a common measure mentioned in most text books. When it comes to practice or seeing research on monetary policy, you hardly find a mention. With this crisis we expect renewed focus on monetary variables etc. So, I thought to describe it a bit.


Money Multiplier in India « Mostly Economics