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Cargill and Mayer

This study by Cargill and Mayer Vaughan examines the effects of increased reserve requirements by the Federal Reserve. Utilizing empirical models, it assesses how changes in the cash reserve ratio (CRR) influence banking operations. Key control variables include bank size, the ratio of time deposits to total deposits, and interbank deposits. The results provide insights into the implications for both member and non-member banks, as well as broader economic indicators such as industrial production.

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Cargill and Mayer

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  1. Cargill and Mayer Vaughan / Economics 639 / American University

  2. Fed Doubles Reserve Requirements

  3. Impact of Reserve Requirement Hike

  4. Preliminary Evidence Increase in Reserve Requirements Mattered

  5. Empirical Models Where: CRR = Cash reserve ratio ∆RR = Percentage point change in reserve requirements Control variables: S = bank size (average assets) TDR = ratio of time to total deposits IBDR = ratio of interbank to total deposits SD = State dummy variable IP = Industrial production mem = member bank non = nonmember banks

  6. Empirical Models Where: CRR = Cash reserve ratio ∆RR = Percentage point change in reserve requirements Control variables: S = bank size (average assets) TDR = ratio of time to total deposits IBDR = ratio of interbank to total deposits SD = State dummy variable IP = Industrial production mem = member bank non = nonmember banks

  7. Results

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