2016/9/20 Monetary Aggregates Monetary Aggregates Monetary Base ·Mo base money high-powered money includes cash or assets that could quickly be Defined as the total currency circulating in the public and the total reserve of the M1 (narrow money supply The sum of currency held by the public and transaction deposits(demand deposits )at -The central bank uses monetary policy to depository institutions(commercial banks, savings adjust the amount of reserve of commercial and loan associations, savings banks, and credit banks, i.e., the money supply Monetary Aggregates The US M1 and M2 Stock(in $BIn) M2 comprises M1, savings(including money market deposit accounts), small-denomination time deposits(time deposits, including retail purchase agreements, in amounts of less than 00 000 dollars), and balances in retail money market mutual funds Economists usually use"broad money"to describe M2 is the commonly used measure of broad money ::是 M2 Stock in Major Economies China Monetary Aggregates(M2) (in Trillion Local Currency) and GDP (in tIn RMB 2008 2016 AUG Growth Rate uro zone 7420 ustralia 36.7 182% 语昌自昌到昌司是舞司 Canada echa M22016/9/20 4 Monetary Aggregates • Monetary Base – base money, high‐powered money –Defined as the total currency circulating in the public and the total reserve of the banking system – The central bank uses monetary policy to adjust the amount of reserve of commercial banks, i.e., the money supply 1‐19 Monetary Aggregates • M0 – includes cash or assets that could quickly be converted into currency • M1 (narrow money supply) – The sum of currency held by the public and transaction deposits (demand deposits) at depository institutions (commercial banks, savings and loan associations, savings banks, and credit unions) 1‐20 Monetary Aggregates • M2 – M2 comprises M1, savings (including money market deposit accounts), small‐denomination time deposits (time deposits, including retail repurchase agreements, in amounts of less than 100 000 dollars), and balances in retail money market mutual funds. • Economists usually use “broad money” to describe the monetary aggregate • M2 is the commonly used measure of broad money.   1‐21 The US M1 and M2 Stock (in $Bln) 1‐22 0 2000 4000 6000 8000 10000 12000 14000 2000‐01 2000‐07 2001‐01 2001‐07 2002‐01 2002‐07 2003‐01 2003‐07 2004‐01 2004‐07 2005‐01 2005‐07 2006‐01 2006‐07 2007‐01 2007‐07 2008‐01 2008‐07 2009‐01 2009‐07 2010‐01 2010‐07 2011‐01 2011‐07 2012‐01 2012‐07 2013‐01 2013‐07 2014‐01 2014‐07 2015‐01 2015‐07 2016‐01 M1 M2 M2 Stock in Major Economies (in Trillion Local Currency） 2008 2016 AUG Growth Rate China 47.5 151.1 218% US 8.2 13.0 59% Euro Zone 8.1 10.5 30% Japan 742.0 942 27% Australia 1.2 1.9 58% UK 1.8 1.6 ‐11% Russia 13.0 36.7 182% Canada 0.9 1.4 56% 1‐23 China Monetary Aggregates (M2) and GDP (in tln RMB) 1‐24 0 20 40 60 80 100 120 140 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 China GDP China M2