The impact of central bank deposits on gdp?


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Whats The impact of central bank deposits on gdp


Banks in Central Point, OR



Answer (3):

johnnie

As your question is wrong itt is hard to get at your meaning, as one pointed out central banks don't take deposits from the Public.

Do you mean how much they have in reserve, or not if they have to shore up a weak currency.

It can affect inflation, if money is put into Circulation.

Also it can affect GDP if money is not flowing around the system as it should, because this can cause Compaines not to have access to Capital from their own Banks. Although it should be noted that the Capital borrowed from banks by Companies is from deposits from the public, not from the Central Bank.

But the money in a Central bank is usually in relation to the state of the Economy, so if anything it is the other way around to your question. I think but I am not sure because of the question.

vethuvettu

To my knowldege

If it is central Bank of a country the question is itself wrong as the Central Bank of a country never accepts deposits from the Public and the Deposits are from the Government only. These deposits will not have much effect on the GDP as the credit is not created on the basis of this.

Zeeshan

The deposits allow an increase of money to be 'capable' of flowing round the economy and so it allows more consumption as people believe they have more money, this generally leads to a rise in AD and thus a rise of GDP. That is the simple explanation.