820:
rate. Interest rates are set by the reserve bank to maintain an inflation rate which is considered neither too high or too low. This is usually determined using a Taylor Rule. The quantity of reserves in the banking system is supported by the open market operations performed by the reserve banks, involving the purchase and sale of various financial instruments, commonly government debt (bonds), usually using "repos". Banks only require enough reserves to facilitate interbank settlement processes. In some countries, reserve banks now pay interest on reserves. This adds another lever to the interest rate control mechanisms available to the reserve bank. Following the 2008 financial crisis, quantitative easing raised the amount of reserves in the banking system, as reserve banks purchased bad debt from the banks, paying for it with reserves. This has left the banking system with an oversupply of reserves. This increase in reserves has had no effect on the level of interest rates. Reserves are never lent out by banks.
150:
25:
686:
538:
581:
694:
760:
819:
is generally presumed to be the policy preserve of reserve banks, who target an interest rate. If control of the amount of base money in the economy is lost due failure by the reserve bank to meet the reserve requirements of the banking system, banks who are short of reserves will bid up the interest
715:
or the central bank. These institutions change the monetary base through open market operations: the buying and selling of government bonds. For example, if they buy government bonds from commercial banks, they pay for them by adding new amounts to the banks’ reserve deposits at the central bank, the
828:
Following IFRS standards, base money is registered as a liability of the central banks' balance sheet, implying base money is by nature a debt from the central bank. However, given the special nature of central bank money – which cannot be redeemed in anything other than base money – numerous
65:, is a useful starting point for translations, but translators must revise errors as necessary and confirm that the translation is accurate, rather than simply copy-pasting machine-translated text into the English Knowledge.
75:
85:
Do not translate text that appears unreliable or low-quality. If possible, verify the text with references provided in the foreign-language article.
742:. However, for those that do not agree with the theory of the money multiplier, the monetary base can be thought of as high powered because of the
1002:(1987). "High-powered money and the monetary base". In Newman, Peter K.; Eatwell, John; Palgrave, Robert Harry Inglis; Milgate, Murray (eds.).
567:
1130:
70:
951:
Kumhof, Michael; Allen, Jason G.; Bateman, Will; Lastra, Rosa M.; Gleeson, Simon; Omarova, Saule T. (14 November 2020).
93:
1094:
1060:
1021:
803:
1041:(1987). "Monetary base". In Newman, Peter K.; Eatwell, John; Palgrave, Robert Harry Inglis; Milgate, Murray (eds.).
785:
106:
Content in this edit is translated from the existing German
Knowledge article at ]; see its history for attribution.
697:
Base money of the Euro zone and money supplies M1, M2 and M3, and euro zone GDP from 1980–2021. Logarithmic scale.
881:
See, e.g., U.S. Federal
Reserve System regulations at 12 C.F.R. section 204.5(a)(1) and 12 C.F.R. section 204.2.
770:
723:(how much money banks must keep on hand instead of loaning out to borrowers). Interest rates, especially on
719:
Typically, a central bank can also influence banking activities by manipulating interest rates and setting
560:
1125:
852:
255:
981:
937:
999:
101:
1042:
1003:
781:
553:
857:
467:
960:
968:
924:
727:(ultra-short-term loans between banks), are themselves influenced by open market operations.
701:
122:
1110:
720:
37:
8:
447:
312:
275:
166:
628:) in a country is the total amount of money created by the central bank. This includes:
149:
777:
472:
442:
396:
334:
270:
115:
890:
See, e.g., U.S. Federal
Reserve System regulation at 12 C.F.R. section 204.5(a)(1)(i).
734:
because its increase will typically result in a much larger increase in the supply of
1090:
1056:
1017:
956:
743:
537:
518:
426:
374:
231:
186:
181:
97:
1089:. Cambridge, Massachusetts: National Bureau of Economic Research. pp. 45–117.
1048:
1038:
1009:
739:
712:
391:
381:
280:
260:
236:
847:
816:
705:
674:
651:
644:
523:
500:
495:
490:
457:
421:
319:
300:
243:
206:
171:
1052:
1013:
842:
830:
735:
621:
416:
356:
344:
141:
916:
1119:
1077:
724:
685:
654:
401:
329:
324:
307:
248:
224:
201:
191:
176:
159:
711:
The monetary base is manipulated during the conduct of monetary policy by a
952:
666:
658:
541:
361:
339:
265:
196:
1081:
1111:
Aggregate
Reserves Of Depository Institutions And The Monetary Base (H.3)
862:
462:
900:
Mankiw, N. Gregory (2002), "Chapter 18: Money Supply and Money Demand",
673:
circulating in the public plus certain types of non-bank deposits with
640:
411:
386:
287:
211:
104:
to the source of your translation. A model attribution edit summary is
589:
580:
1083:
Determinants and
Effects of Changes in the Stock of Money, 1875-1960
788:. Statements consisting only of original research should be removed.
693:
670:
633:
953:"Central Bank Money: Liability, Asset, or Equity of the Nation?"
62:
406:
833:
have argued it should rather be recorded as a form of equity.
708:
tools which directly expand or contract the monetary base.
74:
to this template: there are already 1,881 articles in the
950:
730:
The monetary base has traditionally been considered
58:
915:Archer, David; Moser-Boehm, Paul (29 April 2013).
665:The monetary base should not be confused with the
914:
639:plus the currency that is physically held in the
1117:
738:through banks' loan-making, a ratio called the
716:latter being a component of the monetary base.
100:accompanying your translation by providing an
49:Click for important translation instructions.
36:expand this article with text translated from
561:
568:
554:
148:
804:Learn how and when to remove this message
1044:The New Palgrave Dictionary of Economics
1037:
1005:The New Palgrave Dictionary of Economics
692:
684:
579:
998:
904:(5th ed.), Worth, pp. 482–489
1118:
899:
1076:
893:
753:
18:
13:
1047:. New York: Macmillan. p. 1.
1008:. New York: Macmillan. p. 1.
749:
427:Trade / commerce ministry
14:
1142:
992:
758:
536:
112:{{Translated|de|Monetäre Basis}}
23:
1080:(1965). "High-Powered Money".
944:
908:
884:
875:
669:, which consists of the total
110:You may also add the template
1:
868:
823:
680:
7:
1131:Operations of central banks
836:
784:the claims made and adding
82:will aid in categorization.
10:
1147:
1053:10.1057/9780230226203.3102
1014:10.1057/9780230226203.2726
853:Fractional reserve banking
636:circulating in the public,
256:Deficit / surplus
57:Machine translation, like
357:Monetary (currency) union
38:the corresponding article
917:"Central bank finances"
121:For more guidance, see
16:Measure of money supply
976:Cite journal requires
932:Cite journal requires
858:Credit theory of money
702:Open market operations
698:
690:
585:
468:Discretionary spending
696:
688:
583:
123:Knowledge:Translation
94:copyright attribution
721:reserve requirements
1126:Monetary economics
769:possibly contains
699:
691:
689:U.S. Monetary base
618:central bank money
606:high-powered money
586:
584:Euro monetary base
473:Mandatory spending
397:Non-tariff barrier
335:Monetary authority
102:interlanguage link
1039:Goodhart, Charles
955:. Rochester, NY.
829:scholars such as
814:
813:
806:
771:original research
744:fiscal multiplier
652:commercial banks'
578:
577:
519:Fiscal adjustment
134:
133:
50:
46:
1138:
1107:
1105:
1103:
1088:
1073:
1071:
1069:
1034:
1032:
1030:
986:
985:
979:
974:
972:
964:
948:
942:
941:
935:
930:
928:
920:
912:
906:
905:
897:
891:
888:
882:
879:
809:
802:
798:
795:
789:
786:inline citations
762:
761:
754:
740:money multiplier
713:finance ministry
675:commercial banks
645:commercial banks
570:
563:
556:
540:
392:Gains from trade
382:Balance of trade
261:Finance ministry
152:
138:
137:
113:
107:
81:
80:|topic=
78:, and specifying
63:Google Translate
48:
44:
27:
26:
19:
1146:
1145:
1141:
1140:
1139:
1137:
1136:
1135:
1116:
1115:
1101:
1099:
1097:
1086:
1067:
1065:
1063:
1028:
1026:
1024:
995:
990:
989:
977:
975:
966:
965:
949:
945:
933:
931:
922:
921:
913:
909:
898:
894:
889:
885:
880:
876:
871:
848:Monetary reform
839:
826:
817:Monetary policy
810:
799:
793:
790:
775:
763:
759:
752:
750:Monetary policy
736:demand deposits
706:monetary policy
683:
574:
529:
528:
524:Monetary reform
514:
506:
505:
501:Price stability
496:Economic growth
491:Balanced budget
486:
478:
477:
458:Non-tax revenue
453:
452:
432:
431:
422:Trade diversion
377:
367:
366:
320:Discount window
303:
301:Monetary policy
293:
292:
227:
217:
216:
162:
130:
129:
128:
111:
105:
79:
51:
28:
24:
17:
12:
11:
5:
1144:
1134:
1133:
1128:
1114:
1113:
1108:
1095:
1078:Cagan, Phillip
1074:
1061:
1035:
1022:
994:
993:External links
991:
988:
987:
978:|journal=
943:
934:|journal=
907:
902:Macroeconomics
892:
883:
873:
872:
870:
867:
866:
865:
860:
855:
850:
845:
843:Money creation
838:
835:
831:Michael Kumhof
825:
822:
812:
811:
766:
764:
757:
751:
748:
682:
679:
663:
662:
648:
637:
576:
575:
573:
572:
565:
558:
550:
547:
546:
545:
544:
531:
530:
527:
526:
521:
515:
512:
511:
508:
507:
504:
503:
498:
493:
487:
484:
483:
480:
479:
476:
475:
470:
465:
460:
454:
451:
450:
445:
439:
438:
437:
434:
433:
430:
429:
424:
419:
417:Trade creation
414:
409:
404:
399:
394:
389:
384:
378:
373:
372:
369:
368:
365:
364:
359:
354:
349:
348:
347:
345:currency board
342:
332:
327:
322:
317:
316:
315:
304:
299:
298:
295:
294:
291:
290:
285:
284:
283:
273:
268:
263:
258:
253:
252:
251:
241:
240:
239:
228:
223:
222:
219:
218:
215:
214:
209:
204:
199:
194:
189:
184:
179:
174:
169:
163:
158:
157:
154:
153:
145:
144:
142:Public finance
132:
131:
127:
126:
119:
108:
86:
83:
71:adding a topic
66:
55:
52:
45:(January 2024)
33:
32:
31:
29:
22:
15:
9:
6:
4:
3:
2:
1143:
1132:
1129:
1127:
1124:
1123:
1121:
1112:
1109:
1098:
1096:0-87014-097-3
1092:
1085:
1084:
1079:
1075:
1064:
1062:0-935859-10-1
1058:
1054:
1050:
1046:
1045:
1040:
1036:
1025:
1023:0-935859-10-1
1019:
1015:
1011:
1007:
1006:
1001:
1000:Brunner, Karl
997:
996:
983:
970:
962:
958:
954:
947:
939:
926:
918:
911:
903:
896:
887:
878:
874:
864:
861:
859:
856:
854:
851:
849:
846:
844:
841:
840:
834:
832:
821:
818:
808:
805:
797:
794:February 2022
787:
783:
779:
773:
772:
767:This section
765:
756:
755:
747:
745:
741:
737:
733:
728:
726:
725:federal funds
722:
717:
714:
709:
707:
703:
695:
687:
678:
676:
672:
668:
660:
656:
653:
649:
646:
642:
638:
635:
631:
630:
629:
627:
623:
619:
615:
614:outside money
611:
610:reserve money
607:
603:
599:
595:
594:monetary base
591:
582:
571:
566:
564:
559:
557:
552:
551:
549:
548:
543:
539:
535:
534:
533:
532:
525:
522:
520:
517:
516:
510:
509:
502:
499:
497:
494:
492:
489:
488:
482:
481:
474:
471:
469:
466:
464:
461:
459:
456:
455:
449:
446:
444:
441:
440:
436:
435:
428:
425:
423:
420:
418:
415:
413:
410:
408:
405:
403:
402:Protectionism
400:
398:
395:
393:
390:
388:
385:
383:
380:
379:
376:
371:
370:
363:
360:
358:
355:
353:
352:Monetary base
350:
346:
343:
341:
338:
337:
336:
333:
331:
330:Interest rate
328:
326:
325:Gold reserves
323:
321:
318:
314:
311:
310:
309:
308:Bank reserves
306:
305:
302:
297:
296:
289:
286:
282:
279:
278:
277:
274:
272:
269:
267:
264:
262:
259:
257:
254:
250:
247:
246:
245:
242:
238:
235:
234:
233:
230:
229:
226:
225:Fiscal policy
221:
220:
213:
210:
208:
205:
203:
200:
198:
195:
193:
190:
188:
185:
183:
180:
178:
175:
173:
170:
168:
165:
164:
161:
156:
155:
151:
147:
146:
143:
140:
139:
136:
124:
120:
117:
109:
103:
99:
95:
91:
87:
84:
77:
76:main category
73:
72:
67:
64:
60:
56:
54:
53:
47:
41:
39:
34:You can help
30:
21:
20:
1100:. Retrieved
1082:
1066:. Retrieved
1043:
1027:. Retrieved
1004:
969:cite journal
946:
925:cite journal
910:
901:
895:
886:
877:
827:
815:
800:
791:
768:
732:high-powered
731:
729:
718:
710:
700:
667:money supply
664:
659:central bank
657:held in the
626:narrow money
625:
617:
613:
609:
605:
601:
597:
593:
587:
375:Trade policy
362:Money supply
351:
340:central bank
313:requirements
266:Fiscal union
167:Agricultural
135:
98:edit summary
89:
69:
43:
35:
863:Broad money
620:or, in the
463:Tax revenue
1120:Categories
1102:8 February
1068:8 February
1029:8 February
869:References
824:Accounting
778:improve it
681:Management
632:the total
602:money base
598:base money
412:Trade bloc
387:Free trade
212:Policy mix
187:Investment
182:Industrial
782:verifying
746:instead.
650:plus the
590:economics
116:talk page
68:Consider
40:in German
837:See also
671:currency
655:reserves
634:currency
448:Spending
276:Spending
249:internal
207:Monetary
172:Economic
160:Policies
92:provide
961:3730608
776:Please
485:Optimum
443:Revenue
281:deficit
271:Revenue
114:to the
96:in the
42:.
1093:
1059:
1020:
959:
641:vaults
596:(also
592:, the
542:Portal
513:Reform
407:Tariff
237:policy
232:Budget
202:Fiscal
192:Social
177:Energy
1087:(PDF)
197:Trade
59:DeepL
1104:2011
1091:ISBN
1070:2011
1057:ISBN
1031:2011
1018:ISBN
982:help
957:SSRN
938:help
704:are
244:Debt
90:must
88:You
1049:doi
1010:doi
780:by
643:of
588:In
288:Tax
61:or
1122::
1055:.
1016:.
973::
971:}}
967:{{
929::
927:}}
923:{{
677:.
624:,
622:UK
616:,
612:,
608:,
604:,
600:,
1106:.
1072:.
1051::
1033:.
1012::
984:)
980:(
963:.
940:)
936:(
919:.
807:)
801:(
796:)
792:(
774:.
661:.
647:,
569:e
562:t
555:v
125:.
118:.
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.
