International Economics Course 5

International Economics
Course 5 28-9-2018 Jurne Sleddens



Central banks
Money creaton and removal
 Money creaton (uantiatve easing or loosening
o Open markei operatons
o Re(uired Reserve Rato RRR
o Discouni raie insirumeni
 Money removal (uantiatve tggiening
o Open markei operatons
o Re(uired Reserve Rato RRR
o Discouni raie insirumeni


Open Markei Operatons nsirumeni




On ige riggi pari ii’s ige economy gow we see ii. Lef is egind ige screen.


Re(uired Reserve Rato insirumeni
 Fractonal Reserve anking Sysiem
 anks gave a fracton of igeir deposiis ai gand
 Tgis fracton is r or re(uired reserve rato
 Tge ceniral ank forces anks io adgere io r
 ui anks may exceed r


RRR = R x Deposiis
Deposiis = Toial reserves
Excess reserves = Toial reserves - Re(uired reserves