Some monetary aspects of the excess reserves problem Notes on board staff meeting, May 18, 1936

摘要

Excess reserves constitute a problem because they may lead to an excessive expansion of deposits. Adjusted demand deposits have increased some $8,000,000,000 since 1933 and are larger than in 1929. It would be generally agreed that an additional expansion of $30,000,000,000 of deposits would be excessive in terms of our objective, which is long-term prosperity, or, more precisely, as full a utilization of our productive resources as can be continuously sustained. The problem, however, is whether any further expansion would be desirable. This problem is easier to state than to answer, but an effort must be made to solve it even though much of the essential information is lacking.