Macroeconomic model reference
Money Multiplier Model
The money multiplier model traces how the banking system expands the monetary base into a larger money supply. The multiplier m = (1 + cr)/(cr + rr) depends on the currency-deposit ratio and the reserve-deposit ratio, so M = m * MB.
Theory-based models · Derivation
Money Multiplier derivation: assumptions and equations
Trace the Money Multiplier derivation through assumptions, notation, equations, and failure cases.