Comment by Retric
9 years ago
In theory that's correct, but in practice banks re-sell loans all the time by packaging them as bonds. So total outstanding home loans has been decoupled from that equation.
Further, the velocity of money is important which reduce the multiplier in practice.
However, if your taking this seriously yes you need a curve which is why I said 100 years, but only listed 90 years worth of changes.
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