A Study Of Money Multiplier Of The Bank System Based On The Income And Expenses Of The Microeconomic Units

In this paper the classical premise, the deduction process and the conclusion of the traditional model of money creation of bank system is examined all-around based on the deposit motivation of the enterprises, the bank loans, the circulation process of deposits and loans, the use of enterprises loans, the types of enterprises involved and the circulation of money creation etc, which are worth discussing.By adding a analytical step of the loans reverting to the banks, some new models of money creation are theorized on the basis of the traditional model of money creation of bank system. By adding some new premises, the new models are extended based on the income and expenses of microeconomic units, which included many different leaking factors, the difference in required reserve rate between the commercial banks, the payout of enterprise's production, and the payout of residents'expenses and so on. The new models are more close to the earth than the traditional model.By analyzing the new models, on the one hand, it is proved that the total results of the new models equal to that of the traditional model, considering the cycles of money creation are unlimited; on the other hand, it is also proved that the result of traditional model exceeds that of the new models, considering the cycles are limited in a limited examining period. From all above, we can draw a qualitative conclusion that because the capability of money creation of bank system is not in accord with the anticipation of the traditional model, the central bank rising the required reserve rate frequently contributes little to the fluctuation of money supply, which is also not in accord with the anticipation of the traditional theory of money supply..