More money: understanding recent changes in the monetary base
AbstractThe financial crisis that began in the summer of 2007 took a turn for the worse in September 2008. Until then, Federal Reserve actions taken to improve the functioning financial markets did not affect the monetary base. The unusual lending and purchase of private debt was offset by the sale of Treasury securities so that the total size of the balance sheet of the Fed remained relatively unchanged. In September, however, the Fed stopped selling securities as it made massive purchases of private debt and issued hundreds of billions of dollars in short-term loans. The result was a doubling of the size of the monetary base in the final four months of 2008. This article discusses the details of the programs that the Fed has initiated since the crisis began, shows which programs have grown as the monetary base grew, and discusses some factors that will determine whether this rapid increase in the monetary base will lead to rapid inflation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Federal Reserve Bank of St. Louis in its journal Review.
Volume (Year): (2009)
Issue (Month): Mar ()
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard G. Anderson & Robert H. Rasche, 2000.
"Retail sweep programs and bank reserves, 1994--1999,"
2000-023, Federal Reserve Bank of St. Louis.
- Richard G. Anderson & Robert H. Rasche, 2001. "Retail sweep programs and bank reserves, 1994-1999," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 51-72.
- Daniel L. Thornton, 2009. "The Fed, liquidity, and credit allocation," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 13-22.
- Richard D. Porter & Ruth A. Judson, 1996. "The location of U.S. currency: how much is abroad?," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Oct, pages 883-903.
- Richard G. Anderson & Charles S. Gascon, 2009. "The commercial paper market, the Fed, and the 2007-2009 financial crisis," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 589-612.
- Kevin L. Kliesen, 2010. "Inflation may be the next dragon to slay," The Regional Economist, Federal Reserve Bank of St. Louis, issue Jan, pages 4-9.
- Cohen, Joseph N & Linton, April, 2010. "The historical relationship between inflation and political rebellion, and what it might teach us about neoliberalism," MPRA Paper 22522, University Library of Munich, Germany.
- Zbyněk Revenda, 2009. "Central Bank Monopolies and Money Issuance," Politická ekonomie, University of Economics, Prague, vol. 2009(5), pages 579-600.
- José Francisco Bellod Redondo, 2010. "La Crisis Imposible: Tragedia En Tres Actos," Contribuciones a la Economía, Grupo Eumed.net (Universidad de Málaga), issue 2010-03, March.
- Zbyněk Revenda, 2011. "The Role of Gold in the Monetary System," Český finanční a účetní časopis, University of Economics, Prague, vol. 2011(3), pages 47-67.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Xiao).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.