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dc.contributor.authorHanley, Brian P.en_US
dc.date.accessioned2012-01-24en_US
dc.date.accessioned2012-02-13T10:54:16Z-
dc.date.available2012-02-13T10:54:16Z-
dc.date.issued2012en_US
dc.identifier.citationEconomics: The Open-Access, Open-Assessment E-Journal 6 2012-3 1-25en_US
dc.identifier.pidoi:10.5018/economics-ejournal.ja.2012-3en_US
dc.identifier.urihttp://hdl.handle.net/10419/55264-
dc.description.abstractHistorically, the banking multiplier has been in a range of 4 to 100, with 25% to 1% reserve ratios at most layers of the banking system encompassing the majority of its range in recent centuries. Here it is shown that multipliers over 1 000 can occur from a new mechanism in banking. This new multiplier uses a default insurance note to insure an outstanding loan in order to return the value of the insured amount into capital. The economic impact of this invention is calculably greater than the original invention of reserve banking. The consequence of this lending invention is to render the existing money multiplier equations of reserve banking obsolete where it occurs. The equations describing this new multiplier do not converge. Each set of parameters for reserve percentage, nesting depth, etc. creates a unique logarithmic curve rather than approaching a limit. Thus it is necessary to show the behavior of this new equation by numerical methods. Understanding this new multiplier and associated issues is necessary for economic analyses of the Global Financial Crisis.en_US
dc.language.isoengen_US
dc.publisherKiel Institute for the World Economy (IfW) Kielen_US
dc.relation.ispartofseriesEconomics 2012-3en_US
dc.subject.jelE17en_US
dc.subject.jelE20en_US
dc.subject.jelE51en_US
dc.subject.jelH56en_US
dc.subject.jelH63en_US
dc.subject.ddc330en_US
dc.subject.keywordGFCen_US
dc.subject.keywordglobal financial crisisen_US
dc.subject.keywordCDSen_US
dc.subject.keywordcredit default swapsen_US
dc.subject.keywordAIGen_US
dc.subject.keywordmoney multiplieren_US
dc.subject.keywordbanking multiplieren_US
dc.subject.keywordsynthetic capitalen_US
dc.subject.keywordloan insuranceen_US
dc.subject.stwGeldschöpfungen_US
dc.subject.stwBankenliquiditäten_US
dc.subject.stwBasel IIen_US
dc.subject.stwCredit Default Swapen_US
dc.titleRelease of the Kraken: A novel money multiplier equation's debut in 21st century bankingen_US
dc.typeArticleen_US
dc.identifier.ppn684019345en_US
dc.rights.licensehttp://creativecommons.org/licenses/by-nc/2.0/de/deed.enen_US
dc.identifier.repecRePEc:zbw:ifweej:20123-
Appears in Collections:Economics: The Open-Access, Open-Assessment E-Journal - Journal Articles

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