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Money supply

19 January, 2016 - 11:14

The most common measures are named M0 (narrowest), M1, M2, and M3. In the United States they are defined by the Federal Reserve as follows:

Measure Definition
M0 The total of all physical currency, plus accounts at the central bank that can be exchanged for physical currency.
M1 M0 + those portions of M0 held as reserves or vault cash + the amount in demand accounts ("checking" or "current" accounts).
M2 M1 + most savings accounts, money market accounts, and small denomination time deposits (certificates of deposit of under $100,000).
M3 M2 + all other CDs, deposits of eurodollars and repurchase agreements.
Figure 3.18 Components the U.S. money supply (currency, M1 and M2), 1960–2010 

The Federal Reserve stopped publishing M3 statistics in March 2006, saying that the data cost a lot to collect but did not provide significantly useful information 1. The other three money supply measures continue to be provided in detail.