35 . Baumol-Tobin model

Money demand model taking into account alternative cash holder costs

it is proposed independently of each other in economist, W. Baumolem and J. Tobin. It is the most popular model of demand for money, considering the ESP point of the viewing of monetary reserves. It has been shown here that the individual supports cash reserves as well as the company supports its cash reserves. At any given moment, the household holds a part of its wealth in cash for future purchases. If there is a significant part of wealth in the monetary dust, then, on the one hand, the household always has the necessary amount of money to make transactions, and on the other - it is deprived of the percentage if there is an interest-making assets. If a minor part of wealth is stored in cash, the cooler household may arise the problem of converting parties of wealth in money due to insufficient funds for shopping. Thus, the household is facing the problem of the optimal amount of money.

From the Baumol-Tobin model, it follows: the demand for money is the demand for real cash balances, it increases with the growth of the real national product and is reduced by increasing interest rates.

There is a compromise choice between ease of cash storage for transactions and percentage, which. Received if this money is put in the bank. Before D / X is the problem of the optimal amount of money. It is assumed that the individual spends money uniformlyY / 2 N - Money on hand

On the bank account -Y, n-interns in the bank, f - costs of hike in the bank,i. - annual interest rate. Then the cumulative costs of storage of money on hand (TC) are equalTc \u003d Fn + IY / 2 N

Individual tries to minimizeTC, TC \u003d FN + IY / 2 N »MIN (0) With income growth, the demand for money is growing, and with increasing interest rate drops.

3 6 . Money offer. Monetary base

The money mass is a combination of cash and non-cash purchasing and payment funds, which have individuals, firms, states.

Monetary base (B ) (Increased power, reserve money) - cash outside the banking system (C. ), as well as reserves (R. ) Commercial banks stored in the Central Bank. Cash is the immediate part of the money supply, while bank reserves affect the ability of banks to create new deposits, increasing the offer of money. B \u003d C + R. The increase in the monetary base leads to a multiple (multiplicative) expansion of deposits in commercial banks and money supply.

The offer of money (m) is equal to the amount of cash (c) and the amount of funds on current accounts (D) .m \u003d c + d.

Reserves - the amount of funds made to bank accounts and not issued as credits.

If the banks only have kept money as reserves for demanding by their depositors and were not issued as loans, each current cash amount would increase the amount of funds on current accounts and, accordingly, reduced the amount of cash. At the same time, the offer of money remains the same. Such a system is called 100% bank reservations, and with it banks do not affect the offer of money.

If banks keep part of deposits (rR - Norma reserves) as reserves, and the rest are issued as loans, such a system is called partial bank reservation. Then from each unit of depositsrR remains as a reserve, A (1 -rR ) It is issued as a loan. If this loan has been putting it into another bank for the current account, and this bank adheres to the same norm of reserves, he will leave as reservesrR (1 - RR ) and issuing as loans

(1 - RR) - RR (1 - RR) \u003d (1 - RR ) 2. Let this process continue to infinity, then each invested monetary unit generates 1 /rR monetary units. Since 0< гг < 1, то 1/ rR >1-credit multiplier.Thus, under the system of partial bank reservation, the bank increases the offer of money.

Let R. - Calcutivity / deposits, showing how the population distributes money between cash and means on current accounts.cR \u003d C / D; RR \u003d R / D (SG\u003e 0, 0< rr <1); M / B =(cr +1)/(cr + rr )

Cash multiplier - (CR +1) / (CR + RR ). It shows how much the offer of money increases when the monetary base is increasing per unit.

1. Money protection is proportional to the monetary base;

2. The lower the rate of reserves (rR ), the higher the money multiplier;

3. The lower coefficient cash / deposits (cR ), the higher the money multiplier.

Thus, the supply of money is influenced by not only the central bank, but also commercial banks, as well as the decisions of the population.

3 7 . Credit and money multipliers

Economic meaning of the deposit (credit) multiplier

having indicating how many times the final increase in the money supply (money supply) exceeds the initial increase in the monetary base in the absence of cash in circulation and redundant reserves.

Since Rr.< 1, то депозитный мультипликатор всегда больше единицы.

Since any extension of the money supply is always a consequence of the extension of the monetary base, then:

Coefficient "Cash deposits"

In a more realistic form:

The population usually does not make any cash money on a bank deposit, and some of them leaves them in cash in cash (in the form of monetary residues). The proportion in which the monetary mass is distributed to cash balances and demand deposits is described coefficient "cash deposits" (CR).

Money mass distribution .

Then any increase in money supply will be distributed between the increase in monetary balances and the increase in deposits in a certain proportion:

Since m \u003d d + c, and
,

that

Output redundancy rate.

Commercial banks usually consider the minimum reservation rate of excessore deposits low to maintain normal solvency. In addition, mandatory reserves are stored in the Central Bank. Therefore, commercial banks, as a rule, prefer part of their redundant reserves not to give a loan, but to store in the jar itself. That share of deposits that commercial banks are on average consider it necessary to store in the form of excess reserves, is called the norm of redundant redundancy of deposits (ER):

where ER is the volume of redundant reserves

In the presence of redundant reserves, commercial banks are used to issue loans not all of their loan potential, and minus the amount of excess reserves stored in the bank.

Economic meaning of money multiplier

while showing how many times the final increase in the money supply (money supply) is superior to the initial increase in the monetary base in the presence of monetary residues of the population and redundant reserves in commercial banks.

Since (CR + R)< 1, то денежный мультипликатор всегда больше единицы.

Since any extension of the money supply is always a consequence of the expansion of the monetary base, then in the presence of cash balances in the population and redundant reserves in commercial banks:

38. Credit and monetary policy: control over the money supply.

Central Bank can control money supplyby exposure to monetary base.The change in the monetary base, in turn, has a multiplicative effect on the money supply. Highlight three main monetary policy instruments,with the help of which the Central Bank carries out indirect regulation of the monetary sphere:

1) Change accounting(or refinancing rates), that is, the rates on which the Central Bank credits commercial banks;

2) Change standards of mandatory reserves,that is, the minimum share of deposits, which commercial banks must be stored in the form of reserves (interest-free contributions) in the Central Bank;

3) operations on the open market:purchase or sale of Central Bank of State Securities.

These operations are associated with a change in bank cards \u003d\u003e monetary database and multiplier.

The Central Bank cannot fully control the offer of money, since:

1) Commercial banks themselves determine the amount redundant reserveswhat affects the attituderR and a multiplier;

2) the Central Bank cannot accurately provide for loans that will be issued to commercial banks;

3) the amount cRdetermined by the behavior of the population and other reasons not always associated with the actions of the Central Bank.

The norm of mandatory reserves and its functions. Actual and excess reserves, refinancing rate (accounting)

Mandatory reserves of banks are established by the Central Bank of the Russian Federation as a norm (share expressed as a percentage) in relation to the amount of funds raised. The norms of mandatory reserves are differentiated by types of deposits (deposits). The highest rate of deposits of individuals is highest. Mandatory reserves in the form of deposits are located in the Central Bank of the Russian Federation. Mandatory reserves to a certain extent guarantee the possibility of obtaining deposits by their owners. Mandatory reserves are a mechanism for regulating the overall liquidity of the banking system. Reserve requirements are established in order to limit the credit capabilities of organizations and maintain at a certain level of money supply in circulation. In a difficult financial situation, when, for example, a high rate of inflation, increasing the norm of mandatory reserves significantly reduces the general credit resources, increases the percentage of credit. And this reduces the money supply, and, therefore, reduces the pressure of purchasing demand for prices, blocking inflation.

The backup rate is a share (in%) of the bank. deposits that should contain. As an obligation. Reserves at the Bank's office, or on his correspondent account in the Central Bank.

Excessive reserves \u003d actual reserves - mandatory reserves.

Reserve standards:

• 1) carrying out interbank settlements
• 2) control over the ability of individual commercial banks to lending

Excessive reserves - the bank has the right to dispose of excess reserves on its discretion - the amount on which the actual reserves of the bank exceed its mandatory reserve. Excessive reserves can be used by commercial banks to provide loans.

Actual reserves - the amount of bank deposits, that is, actual deposits. Actual reserves - cash reserves received from depositors who own the bank at this time. On excess reserves, the bank can issue loans and receive interest income from them. Therefore, banks usually try to limit the size of their mandatory reserves to a permissible value, since deposits in the Central Bank do not bring interest.

The accounting rate, or the refinancing rate, is% for which the Central Bank issues a loan to other banks. Such loans do not require compulsory reservation. The decrease in the refinancing rate contributes to the expansion of lending in the country and accordingly increases the money supply: lower refinancing rates allow commercial banks to credit enterprises and the population also on more acceptable conditions. An increase in the account has an opposite impact on a monetary proposal.

Excessive reserves

Excessive reserves

exceeding the minimum level of reserve reserves that banks must be kept in the form of cash in their own storage or in the form of deposits in the Central Bank of the country.

Raisberg BA, Lozovsky L.Sh., Starodubtseva E.B.. Modern Economic Dictionary. - 2nd ed., Act. M.: Infra-m. 479 p.. 1999 .

Economic Dictionary. 2000 .

Watch what is "redundant reserves" in other dictionaries:

- (Excess Reserves) available from the bank reserves exceeding their volumes. This undesirable situation arises as a result of small demand for loans or high interest rates. Banks often sell unnecessary reserves to each other. Finance. ... ... Financial vocabulary

excessive reserves - Available from the bank reserves exceeding their volumes. This undesirable situation arises as a result of small demand for loans or high interest rates. Banks often sell unnecessary reserves to each other. ... ... Technical translator directory

Excessive reserves - (Excess Reserves) reserves that the deposit institution (or banking system as a whole) has beyond mandatory reserves; Total reserves minus mandatory ... Modern money and banking: Glossary

Excessive reserves - Any excess of the size of existing reserves compared to the required reserves ... Investment Dictionary

excessive reserves - Exceeding the minimum level of reserve reserves that banks must necessarily keep in the form of cash in their own storage or in the form of deposits in the central bank of the country ... Dictionary of economic terms

- (see excess reserves) ... Encyclopedic Dictionary of Economics and Law

In Honduras, there are only three products: nuts, galoshes and ties.

According to the data given in the table, calculate: 1. Nominal and real GDP 2006 and 2013, 2. Department and consumer price index, if 2006. - Basic.3. How changed the cost of living and price level during this period?

Decision:

Since 2006 - basic, nominal and real GDP 2006. match up:

Where is the price of good in the base period (2006), - the amount of good in the base period (2006).

Nominal GDP 2013 - This is a GDP designed at 2013 prices.

Where is the price of good in the current period (2013), - the amount of good in the current period (2013).

Real GDP 2013 is GDP, measured in prices 2006.

The GDP deflator is calculated using the Paashe laral formula or index where the scope uses a set of the current period (2013):

The consumer price index (CPI) is calculated by the formula of Lasseares or price index with basic scales (- the volume of the production of individual types of goods and services for 2006).

Task number 3. Calculation of the norm of mandatory reserves

What is equal to the norm of mandatory reserves, if the obligatory reserves of the bank account for $ 25 million, and deposits are $ 200 million?

Decision:

The norm of mandatory reserves is calculated by the formula:

where is the value of the required reserves of the bank, the value of deposits.

Task number 4. Calculation of excess bank reserves

The actual reserves of the bank are equal to $ 30 million, the total amount of current deposits is $ 100 million, the norm of mandatory reserves is 10%. What are the redundant reserves of the bank?

Solution: The actual reserves of the bank are made up of mandatory and redundant reserves:

In order to determine the amount of mandatory reserves of the bank, it is necessary to multiply the value of deposits (D) to multiply the mandatory reserve ratios (RR obligations):

We get a formula for calculating excess reserves:

Task number 9. Calculation of the value of the bank's credit potential

What maximum loan value can be issued by the bank if the rate of mandatory reserves is 20%, and the value of the bank's mandatory reserves is equal to $ 30 million?

Decision:

The value of the bank's credit capabilities is equal to the difference between the total amount of deposits and the magnitude of mandatory reserves:

The magnitude of deposits:

Bank credit potential:

Task number 18. Calculation of value added

Car manufacturing company acquired a rental at the steel company in the amount of 1,500 thousand dollars., Tires from a tire plant in the amount of 600 thousand dollars, components of various firms in the amount of 1,200 thousand dollars, paid a salary by its working in the amount of 1000 thousand. dol., spent 300 thousand dollars. On the replacement of worn equipment and sold produced 200 cars for 30 thousand dollars. Each, while the profit of the company amounted to 400 thousand dollars. Determine the value of the value added by the automotive company.

Decision:

The cost added by each manufacturer (company) is equal to the difference between the sales revenue and the value of raw materials and materials (intermediate products) purchased by them from other manufacturers (firms), and represents the net contribution of each manufacturer (firm) to the cumulative amount of issue.

Task number 15. Calculation of GDP, GNP, ChVP, CHDP, ND, LD, RDD, etc.

The following macroeconomic indicators are given, billion dollars:

Define: Cost of consumed capital, gross investment, government procurement of goods and services, net exports, wages, government budget balance, GDP, GNP, ChVP, CHDP, ND, LD, RDD.

Task number 20. Calculation of real GDP, the growth rate of GDP and the rate of inflation

The country's economy is characterized by the following indicators:

Determine:

a) real GDP 2010 in prices 2008;

b) real GDP 2011 in prices 2008;

c) rated GDP growth rates in the period from 2010 to 2011;

d) the growth rates of real GDP (in 2008 prices) in the period from 2010 to 2011;

e) the tempo of inflation (the growth rate of the GDP deflator) in the period from 2010 to 2011

Task number 22. Calculation of national income

What is the national income, if:

GDP amounted to 6500 billion dollars,

cost of consumed capital - 550 billion dollars,

direct taxes - 590 billion dollars,

indirect taxes - $ 380 billion,

pure factor income from abroad - $ 250 billion.

The reservation rate (mandatory reservation) is a certain percentage of banking capital, which banks transfer to accounts in the Central Bank. But there are also reserve funds accumulated in the banks themselves to mitigate bank risks.

2.4. Cash control tools

Table 1

Credit Policy Tools

When implementing credit and monetary policy, the use of tools as direct (credit limits, interest rate regulation) and indirect regulation (change in the norm of mandatory reserves, a change in the refinancing rate, operation on the open market). The efficiency of the use of indirect regulation tools is closely related to the degree of money development. As the world practice and the Russian reform experience shows, in transitional economies, especially in the first stages of transformations, direct, and indirect tools with a gradual displacement of the first second are used.

When implementing credit and monetary policy, the Central Bank acts primarily on monetary mass - Full volume of cash and cashless money issued.

In accordance with the equation of the I. Fisher's exchange (equation of a quantitative theory of money) in the country, the monetary mass (m) must comply with the amount of prices of goods and services issued (PQ), taking into account the fact that the same monetary signs can serve commodity exchange several times (V) per year. In this way:

2.5. Refinancing

The refinancing rate is the amount of interest on the annual basis, subject to the central bank of the country for loans that the Central Bank provided credit organizations.

Features of refinancing rates in Russia

The refinancing rate of the Bank of Russia acts as an important indicator of monetary policy. It is currently not formally attached to the actual rates established by the Bank of Russia for certain types of operations. However, in fact, the rate of refinancing of the Bank of Russia is based on the bid of the "Overnight" loan of the Bank of Russia (one-day settlement loan) and is numerically equal to it. In addition to the function of the economic regulator, the refinancing rate is used in Russia for tax purposes, calculating penalties and fines.

Application of refinancing rates

Taxation

Interest on ruble bank deposits taxed by NDFL. Interest is taxed in the amount of a more refinancing rate operating during the period for which they are accrued, plus 5 percentage points.

(According to foreign exchange bank deposits, interest in the amount of more than 9, without the use of the refinancing rate)

Pencing for the delay in tax or collection. Penios are equal to the 1/300 acting refinancing rate for each day of delay.

Calculation of the tax base when receiving an income taxpayer in the form of material benefits from saving percentage for the use of borrowed (credit) means. The tax base is defined as an excess of the amount of interest expressed in rubles, calculated on the basis of two thirds of the refinancing rate, acting at the time of receipt of income, over the amount of interest, calculated on the basis of the contract conditions.

In the absence of a loan agreement on the amount of interest, their size is determined by the banking interest rate (refinancing rate) on the day of paying the borrower of the amount of debt or its part.

Central Bank of the Russian Federation The refinancing rate is currently established in the amount of 8.25% per annum. Current size of the refinancing rate is established by the Bank of Russia indicating 2873 - from September 14, 2012