A Dynamic Approach to Money Supply

A Dynamic Approach to Money Supply

Loading document ...
Loading page ...


Author(s): Yougui Wang, Guobin Zhou, Wanting Xiong

Download Full PDF Read Complete Article

594 1031 47-53 Volume 2 - Jul 2013


In this paper, we present the mechanism of money supply from a dynamic perspective, in which the behaviors of the sectors involved in the process of money creation and the interplay among them are taken into account. Specially, we introduce households’ withdrawals of deposit and firms’ repayments to loan, which are ignored in the conventional statement of money creation process. By deriving and analyzing the equilibrium solution to the dynamic equations which characterize the process, we can discuss the corresponding influence of each sector on the money supply.


  1. Phillips, C. A. 1920. Bank Credit. New York :Macmillan
  2. Samuelson, P. 1997. Economic:TheOirginal 1948 Edition. Irwin:McGraw-Hill
  3. Cagan, P. 1958. “The Demand for Currency Relative to the Total Money Supply,” Journal of Political Economy, 66(4):303-328
  4. Ahrensdorf, J. and S. Kanesathasan. 1960. “Variations in the Money Multiplier and Their Implications for Central Banking,” Staff Papers-International Monetary Fund, 8(1):126-149
  5. Teigen, R. L. 1964. “Demand and Supply Functions for Money in the United States: Some Structural Estimates,” Econometrica, 32(4): 476-509
  6. Friedman, M. and A. Schwartz.1963. A Monetary History of the U.S.1867-1960. Princeton, N.J :Princeton Univ. Press
  7. Cagan, P. 1965.Deterninants and Effects of Changes in the Stock of Money,1875-1960. New York:Columbia Univ. Press
  8. Jordan, J. 1969. “Elements of Money Stock Determination,” Federal Reserve Bank of St.Louis Review, 1969(10):10-19
  9. Brunner, K. and H. Meltzer. 1964. “ Some Further Investigations of Demand and Supply Functions for Money,” The Journal of Finance, 19(2): 240-283
  10. Bourne, C. 1976. “The Determination of Jamaica Money Stock: 1961-1971,” Social and Economic Studies, 25(4):367-385
  11. McClean, A. W. A. 1985. “A Further Comment On Conventional Money Multiplier,” Social and Economic Studies, 34(3):259-264
  12. He, P., L. X .Huang, and R. Wright. 2005. “Money and Banking In Search Equilibrium,” International Economic Review, 46(2): 637-670
  13. Berardi, M. 2007. “ Beyond the Static Money Multiplier In Search of a Dynamic Theory of Money,” in Artificial Markets Modeling, A. Consiglio, ed. Berlin, Heidelberg : Springer, pp. 3-16

Cite this Article:

International Journal of Sciences is Open Access Journal.
This article is licensed under a Creative Commons Attribution 4.0 International (CC BY 4.0) License.
Author(s) retain the copyrights of this article, though, publication rights are with Alkhaer Publications.

Search Articles

Issue August 2021

Volume 10, August 2021

Table of Contents

World-wide Delivery is FREE

Share this Issue with Friends:

Submit your Paper