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M1 Money Multiplier

Source: Organization for economic cooperation and development

 

United States M1 money multiplier has gradually trended downward since 1990. In 1991; during recession, decrease was higher than previous year. M1 money multiplier then recovered from 1992, experienced a moderate increase till mid 1993, after which there was a drastic decrease till 2008 recession where it experienced a free fall from above 1.5 to below 1.0.  Since then M1 multiplier of the United States has trended between 1.0 and 0.5.

Question 2

M1 for

M1 Money Multiplier

Source: Organization for economic cooperation and development

 

United States M1 money multiplier has gradually trended downward since 1990. In 1991; during recession, decrease was higher than previous year. M1 money multiplier then recovered from 1992, experienced a moderate increase till mid 1993, after which there was a drastic decrease till 2008 recession where it experienced a free fall from above 1.5 to below 1.0.  Since then M1 multiplier of the United States has trended between 1.0 and 0.5.

Question 2

M1 for United States

Source: Organization for economic cooperation and development

 

M1 for China

Source: Organization for economic cooperation and development

Increase in money supply leads to decrease in purchasing power of money; therefore inflation. Both china and United States experienced increased in M1 over the years. In both cases inflation has been high in the last year of the data; 2013 and lowest in the first year of the data; for china 1999 and United States 1990 United States

Source: Organization for economic cooperation and development

 

M1 for China

Source: Organization for economic cooperation and development

Increase in money supply leads to decrease in purchasing power of money; therefore inflation. Both china and United States experienced increased in M1 over the years. In both cases inflation has been high in the last year of the data; 2013 and lowest in the first year of the data; for china 1999 and United States 1990

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