Journal Article A Note on the Multiplier Get access E. S. Shaw E. S. Shaw Stanford, California Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 6, Issue 1, October 1938, Pages 60–64, https://doi.org/10.2307/2967539 Published: 01 October 1938

THIS study is concerned with the optimal, or warranted, growth of the monetary system. It constructs a rudimentary model of financial developrlent and deduces optimal trends in the money supply from a demand equation for money balances that is sensitive to both real and financial phenomena of growth. This model, we suggest, is relevant in both retrospect and prospect to the American economy. Against the trends that emerge from the model we array data on this country's financial and monetary experience since i8oo. The fit may be good enough to justify further experimentation with the demand equation for money as one basis for defining secular standards of monetary policy and for revising the structure and interrelationships of our financial institutions, monetary and nonmonetary alike.