Total value of money available in an economy at a specific point in time
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In macroeconomics, money supply (or money stock) refers to the total volume of money held by the public at a particular point in time. There are several ways to define "money", but standard measures usually include currency in circulation (i.e. physical cash) and demand deposits (depositors' easily accessed assets on the books of financial institutions).[1][2] Money supply data is recorded and published, usually by the national statistical agency or the central bank of the country. Empirical money supply measures are usually named M1, M2, M3, etc., according to how wide a definition of money they embrace. The precise definitions vary from country to country, in part depending on national financial institutional traditions.
Even for narrow aggregates like M1, by far the largest part of the money supply consists of deposits in commercial banks, whereas currency (banknotes and coins) issued by central banks only makes up a small part of the total money supply in modern economies. The public's demand for currency and bank deposits and commercial banks' supply of loans are consequently important determinants of money supply changes. As these decisions are influenced by central banks' monetary policy, not least their setting of interest rates, the money supply is ultimately determined by complex interactions between non-banks, commercial banks and central banks.
According to the quantity theory supported by the monetarist school of thought, there is a tight causal connection between growth in the money supply and inflation. In particular during the 1970s and 1980s this idea was influential, and several major central banks during that period attempted to control the money supply closely, following a monetary policy target of increasing the money supply stably. However, the strategy was generally found to be impractical because money demand turned out to be too unstable for the strategy to work as intended.
Consequently, the money supply has lost its central role in monetary policy, and central banks today generally do not try to control the money supply. Instead they focus on adjusting interest rates, in developed countries normally as part of a direct inflation target which leaves little room for a special emphasis on the money supply. Money supply measures may still play a role in monetary policy, however, as one of many economic indicators that central bankers monitor to judge likely future movements in central variables like employment and inflation.
^Alan Deardorff. "Money supply," Deardorff's Glossary of International Economics
^Karl Brunner, "money supply," The New Palgrave: A Dictionary of Economics, v. 3, p. 527.
In macroeconomics, moneysupply (or money stock) refers to the total volume of money held by the public at a particular point in time. There are several...
monetary economics, the money multiplier is the ratio of the moneysupply to the monetary base (i.e. central bank money). If the money multiplier is stable...
debts, public and private", in the case of the United States dollar. The moneysupply of a country comprises all currency in circulation (banknotes and coins...
Money creation, or money issuance, is the process by which the moneysupply of a country, or an economic or monetary region, is increased. In most modern...
little of the supply of broad money is physical currency. For example, in December 2010 in the U.S., of the $8,853.4 billion of broad moneysupply (M2), only...
value of the moneysupply; in this case the moneysupply curve is perfectly elastic. The demand for money intersects with the moneysupply to determine...
base (also base money, money base, high-powered money, reserve money, outside money, central bank money or, in the UK, narrow money) in a country is...
exchange rate system. A third monetary policy strategy, targeting the moneysupply, was widely followed during the 1980s, but has diminished in popularity...
how many times money is changing hands. The concept relates the size of economic activity to a given moneysupply, and the speed of money exchange is one...
usually considered money and form the greater part of the narrowly defined moneysupply of a country. Simply put, these are deposits in the bank that can be...
directly proportional to the amount of money in circulation (i.e., the moneysupply), and that the causality runs from money to prices. This implies that the...
happens when supply is high (when excess production occurs), when demand is low (when consumption decreases), or when the moneysupply decreases (sometimes...
The real demand for money is defined as the nominal amount of money demanded divided by the price level. For a given moneysupply the locus of income-interest...
liquidity trap are interest rates that are close to zero and changes in the moneysupply that fail to translate into changes in the price level. John Maynard...
States), a money bill or supply bill is a bill that solely concerns taxation or government spending (also known as appropriation of money), as opposed...
onwards, made much larger variations in the supply of money possible. Rapid increases in the moneysupply have taken place a number of times in countries...
stagflation if it creates policies that harm industry while growing the moneysupply too quickly. These two things would probably have to occur simultaneously...
economics, broad money is a measure of the amount of money, or moneysupply, in a national economy including both highly liquid "narrow money" and less liquid...
official interest rate. The monetarist theory states that variations in the moneysupply have major influences on national output in the short run and on price...
monetary authority as a tool in monetary policy, to influence the country's moneysupply by limiting or expanding the amount of lending by the banks. Monetary...
control of the moneysupply will inevitably lead to hyperinflation. MMT's main tenets are that a government that issues its own fiat money: Can pay for...
of goods, and in the supply of currency. Typically, however, the general price level rises even more rapidly than the moneysupply as people try ridding...
Money laundering is the process of illegally concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement...