The effects of external money creation on macroeconomic, considering the inter - bank market with a dynamic general equilibrium method

Abstract

Deposits are the most valuable source of banks . analyzing the effect of change of lending power on macroeconomic variables such as production and inflation is important. On the other hand , the inter -bank market will help regulate liquidity in the banking sector . defining the inter - bank market in the public balance model gives us a better definition of the traditional effects of policy instruments such as the reserve requirement rate. in this study , we tried to consider the inter - bank sector and the balance sheet of commercial banks and the central bank by using the random dynamic general balance model to finance the circulation and investment in the housing sector , on the ability of bank lending and macroeconomic variables. After studying the dynamics of the model with a view to considering the inter - bank market , the lending banks will always allocate a percentage of their resources with different processes , such as the establishment of the bank - related companies to invest in the housing sector . due to the negative momentum of the reserve requirement rate, the outcome of the investment of commercial banks in the housing sector is assessed as a result of the economic conditions in the economy and long - term conflict of bank resources in the sector , reducing facilities and production rates . this leads to an increase in inflation and decrease in household purchasing power from consumption goods and capital reduction and reduction

Keywords

• mony creation
• inter-bank market
• dynamic general equilibrium
• reserve requirement rate