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Abstract

This paper introduces a generalized money M2 multiplier formula to the literature for a monetary system with Reserve Option Mechanism ROM. Various features of the proposed multiplier are then explored using monthly Turkish data during the decade 2005 to 2015. We report a step increase in the magnitude and a slight upward adjustment in the long-run trend of the multiplier with the adoption of ROM. We provide evidence for substantial change in the seasonal pattern of the multiplier, cash ratio, required and excess reserves under ROM. We show that money M2 multiplier is less volatile in a monetary system with ROM and discuss the subsequent stabilizing influence of more predictable multiplier on the foreign exchange market.



Item Type: MPRA Paper -

Original Title: Money Multiplier under Reserve Option Mechanism-

English Title: Money Multiplier under Reserve Option Mechanism-

Language: English-

Keywords: Money multiplier, macroprudential policy, reserve option mechanism, reserve requirements, financial stability-

Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply ; Credit ; Money MultipliersE - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary PolicyE - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their PoliciesF - International Economics > F3 - International Finance > F31 - Foreign Exchange-





Autor: Akturk, Halit

Fuente: https://mpra.ub.uni-muenchen.de/64803/







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