THE ECONOMICS OF MONEY,BANKING, AND FINANCIAL MARKETS 459

CHAPTER 16 The Money Supply Process 427 Desired Reserves Ratio, r Currency Ratio, c 0.40 0.08 End of Final Banking Crisis 0.35 0.07 0.30 0.06 0.25 0.05 c 0.20 0.04 0.15 0.03 Start of First Banking Crisis 0.10 0.02 r 0.05 0.01 0.0 0.0 1929 1930 F I G U R E 16 - 1931 1932 1933 Desired Reserves Ratio and Currency Ratio, 1929 1933 Source: Federal Reserve Bulletin; Milton Friedman and Anna Jacobson Schwartz, A Monetary History of the United States, 1867 1960 (Princeton, N.J.: Princeton University Press, 1963), p 333 Money Supply (US$ billions) 29 28 27 26 25 24 M1 23 22 Start of First Banking Crisis 21 20 19 End of Final Banking Crisis Monetary Base 1929 F I G U R E 16 - 1930 1931 1932 1933 M1 and the Monetary Base, 1929 1933 Source: Milton Friedman and Anna Jacobson Schwartz, A Monetary History of the United States, 1867 1960 (Princeton, N.J.: Princeton University Press, 1963), p 333