- Whatever Became of the Money Multiplier?（Ed Dolan's Econ Blog）
Your textbook will go on to explain that the money multiplier gives the Fed great power over the economy. The Fed is able to use open market operations (purchases and sales of government bonds) to control the monetary base. The monetary base, in turn, serves as the raw material from which banks create ordinary money for the rest of us.
しかしながら、複数の過去記事で説明したように、このモデルは現実とは合致していません。銀行は"reserves first"ではなく"loans first"、すなわち、貸出は準備預金の量に制約されていないからです。貸出を制約しているのは、資金需要と銀行の資本です。資金需要が乏しい状況では、中央銀行が準備預金を増やしても、貸出とマネーストック増加にはつながらず、超過準備が積み上がるだけであることは、量的緩和を行う各国の現状が示しています。
The first of these constraints is the demand for loans. No matter how much they hold in reserves, banks will not make loans unless they see lending opportunities that produce a sufficiently high risk-adjusted return to allow a profit, after taking into account the cost of funding the loan and an appropriate margin for administrative costs. Absent adequate loan demand, any attempt by the Fed to pump more reserves into the system through open market operations will simply lead banks to accumulate excess reserves, not to make more loans.
- Four Stories of Quantitative Easing（Federal Reserve Bank of St. Louis REVIEW）
A remarkable consistency among the monetary expansion policies of all four central banks is that while all measures led to sharp increases in the monetary base, none led to sharp increases in broader monetary aggregates (see Figure 4). The broader aggregates did not increase because banks voluntarily held the increased monetary base as bank reserves—safe, liquid assets in high demand during periods of economic uncertainty.
In a demand-constrained or capital-constrained banking system, the money multiplier not only ceases to operate, it becomes entirely irrelevant.
- Kill the Money Multiplier!（mainly macro）
But I think it also does harm, because it gives the impression that banks are passive, just translating savings into investment via loans.
- The impact of QE on the UK economy — some supportive monetarist arithmetic（Bank of England Working Paper）
The aim of the policy was to induce a rebalancing of portfolios by the private sector. In short, asset purchases should lead to an increase in the prices of government bonds and other close substitutes and a fall in their yields. In turn, the implied rise in the value of portfolios and the lower cost of external finance should lead to a boost in consumption and investment spending in the economy.
- Transcript of Chairman Bernanke’s Press Conference December 12, 2012（The Federal Reserve）
…what matters primarily is the mix of assets on the balance sheet, on the asset side of the balance sheet. So what’s important is the fact that we’re acquiring Treasury securities and MBS, taking those out of the market, you know, forcing investors into other closely related assets and that’s where the stimulus comes from, not so much in the size of the balance sheet per se.
There is not any sign either of current inflation or of any—there’s no strong evidence that there are any increases in inflation expectations for that matter, … We want to be sure that there’s no misunderstanding, that there’s no effect on inflation expectations from the size of our balance sheet.
The proliferating research on the effects of QE generally indicates that it had the desired effects on asset prices but the effects on the broader economy are much more difficult to discern because it is not possible to know with any certainty how economic conditions would have evolved without these policies in place.