1.1 Money - central banks and the policy rate

An all-round, technical description of central banking, including:

·        The central bank balance sheet

·        The use of the CBRAs

·        Central bank operations

·        Reserves are a balancing figure

·        Required versus free reserves

·        The impact of monetary policy

·        Fractional banking and the multiplier

·        A quick note on full reserve banking

·        Targeting the quantity of money

·        The link between narrow money and money supply

·        The link between money supply and inflation

·        Targeting the price of money

·        Central bank income

The paper is readable, to-the-point, not too long (17 pages), and offers the reader a rounded introduction to the subject and to the contemporary issues. It is interesting and informative in its own right, and also forms a useful preface to the remaining papers on this site. Importantly, it is free of the bias (and sometimes outright nonsense) which can be found in some quarters of the internet.