|A second issue involves the effect of the large volume of reserves created as we buy assets. [. . .] The huge quantity of bank reserves that were created has been seen largely as a byproduct of the purchases that would be unlikely to have a significant independent effect on financial markets and the economy. This view is not consistent with the simple models in many textbooks or the monetarist tradition in monetary policy, which emphasizes a line of causation from reserves to the money supply to economic activity and inflation. . . . [W]e will need to watch and study this channel carefully.|
Donald L. Kohn, Vice Chairman of the Federal Reserve Board, March 24, 2010
Fed finally admits what MMT'ers have been saying for a long time. The "money multiplier" is fiction, which is why all their easing efforts have had zero effect on the economy, bank lending and inflation.
Here is the link to the Fed's paper. Read here.