The money multiplier declined significantly during theperiod 1930–1933 and also during the recent financial crisis of 2008–2010. Yet the M1 money supplydecreased by 25% in the Depression period but increasedby more than 20% during the recent financial crisis.What explains the difference in outcomes?

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter12: Money And Banking
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Problem 8E
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The money multiplier declined significantly during the
period 1930–1933 and also during the recent financial crisis of 2008–2010. Yet the M1 money supply
decreased by 25% in the Depression period but increased
by more than 20% during the recent financial crisis.
What explains the difference in outcomes?

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