The name is absent



Empirical CDF

0.9          ...................■........... ■.......................-

0.8     ....................:.. ʃ/.................:.......................-

0.7 -■ ■■..................j√rj-......................:.......................-

0.6 ---:..............√j. .........................:.......................-

0.5        ...............;........................■.......................-

0.4 --;.....7--............■........................:.......................-

0.3-----7-................:........................:.......................-

0.2    jf-.................i........................:.......................-

0.1  -■  .....................i........................:.......................-

01--------------------------------i----------------------------------i---------------------------------

1                           1.5                           2                          2.5

Value of the multiplier

Figure 1: Empirical cdf of average (dotted line) and dynamic (solid line) multi-
pliers.

system and interrupts the multiplicative process of money creation. This implies
that heterogeneity is important, and can not be simply averaged out. In fact,
the value of the multiplier computed with (9) is different from the one we would
obtain by using averages of all the reserve∕deposit and currency∕deposit ratios:

n

1 + n cu^

ma = —----h≡^-k’               (1°)

n                  tv

n Vcm + ɪ reb
h=l         b=l

where к is the number of banks and n the number of households in the economy.
Here indexes represent individual banks and households. Under homogeneity
(
Vb, reb = re; Vh, cuh = cu), (8) = (9) = (1°). But with heterogeneous agents,
this is not in general true, as it can be seen from a simple experiment. We create
1°° different economies, each characterized by 1°°° banks and 1°°° households
with randomly drawn individual ratios and derive the empirical cumulative dis-
tribution function (cdf) for the dynamic multiplier computed using (9) and for
the one computed using averages as in (1°). As can be seen in Fig. 1, the
average multiplier
ma varies over a restricted range of values, as much of the
variability is washed out by the averaging.

When the behavioural parameters are heterogeneous, the value of the dy-
namic multiplier depends, among other things, on the position where the process
starts (for an exogenous intervention, where the CB “drops” the monetary base).
The system is in fact path dependent and the order by which agents take part
in the process becomes relevant. This is confirmed by our simulations when we
compute the dynamic multiplier 1°°° times for the same economy, each time
changing the order by which agents are activated. Results show that the multi-
plier can vary over a wide range of values,
for the same economy, depending on



More intriguing information

1. Constructing the Phylomemetic Tree Case of Study: Indonesian Tradition-Inspired Buildings
2. Reconsidering the value of pupil attitudes to studying post-16: a caution for Paul Croll
3. Hemmnisse für die Vernetzungen von Wissenschaft und Wirtschaft abbauen
4. Measuring and Testing Advertising-Induced Rotation in the Demand Curve
5. Errors in recorded security prices and the turn-of-the year effect
6. Why unwinding preferences is not the same as liberalisation: the case of sugar
7. The name is absent
8. Permanent and Transitory Policy Shocks in an Empirical Macro Model with Asymmetric Information
9. IMMIGRATION AND AGRICULTURAL LABOR POLICIES
10. Clinical Teaching and OSCE in Pediatrics
11. Educational Inequalities Among School Leavers in Ireland 1979-1994
12. Governance Control Mechanisms in Portuguese Agricultural Credit Cooperatives
13. An Empirical Analysis of the Curvature Factor of the Term Structure of Interest Rates
14. The name is absent
15. Detecting Multiple Breaks in Financial Market Volatility Dynamics
16. Spatial patterns in intermunicipal Danish commuting
17. Testing Panel Data Regression Models with Spatial Error Correlation
18. The name is absent
19. The InnoRegio-program: a new way to promote regional innovation networks - empirical results of the complementary research -
20. Innovation Trajectories in Honduras’ Coffee Value Chain. Public and Private Influence on the Use of New Knowledge and Technology among Coffee Growers