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Money Definitions

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  • Joe Casey
    Definitions M1: The sum of currency held outside the vaults of depository institutions, Federal Reserve Banks, and the U.S. Treasury; travelers checks; and
    Message 1 of 1 , Oct 15, 2008
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      Definitions

      M1

      : The sum of currency held outside the vaults of depository institutions,

      Federal Reserve Banks, and the U.S. Treasury; travelers checks; and demand

      and other checkable deposits issued by financial institutions (except demand

      deposits due to the Treasury and depository institutions), minus cash items in

      process of collection and Federal Reserve float.

      MZM (money, zero maturity)

      : M2 minus small-denomination time deposits,

      plus institutional money market mutual funds (that is, those included in M3 but

      excluded from M2). The label MZM was coined by William Poole (1991); the

      aggregate itself was proposed earlier by Motley (1988).

      M2

      : M1 plus savings deposits (including money market deposit accounts)

      and small-denomination (under $100,000) time deposits issued by financial

      institutions; and shares in retail money market mutual funds (funds with initial

      investments under $50,000), net of retirement accounts.

      M3

      : M2 plus large-denomination ($100,000 or more) time deposits; repurchase

      agreements issued by depository institutions; Eurodollar deposits, specifically,

      dollar-denominated deposits due to nonbank U.S. addresses held at foreign

      offices of U.S. banks worldwide and all banking offices in Canada and the

      United Kingdom; and institutional money market mutual funds (funds with

      initial investments of $50,000 or more).

      Bank Credit

      : All loans, leases, and securities held by commercial banks.

      Domestic Nonfinancial Debt

      : Total credit market liabilities of the U.S.

      Treasury, federally sponsored agencies, state and local governments, households,

      and nonfinancial firms. End-of-period basis.

      Adjusted Monetary Base

      : The sum of currency in circulation outside Federal

      Reserve Banks and the U.S. Treasury, deposits of depository financial institutions

      at Federal Reserve Banks, and an adjustment for the effects of changes

      in statutory reserve requirements on the quantity of base money held by depositories.

      This series is a spliced chain index; see Anderson and Rasche (1996a,b,

      2001, 2003).

      Adjusted Reserves

      : The sum of vault cash and Federal Reserve Bank deposits

      held by depository institutions and an adjustment for the effects of changes in

      statutory reserve requirements on the quantity of base money held by depositories.

      This spliced chain index is numerically larger than the Board of

      GovernorsÂ’ measure, which excludes vault cash not used to satisfy statutory

      reserve requirements and Federal Reserve Bank deposits used to satisfy required

      clearing balance contracts; see Anderson and Rasche (1996a, 2001, 2003).

      Monetary Services Index

      : An index that measures the flow of monetary

      services received by households and firms from their holdings of liquid assets;

      see Anderson, Jones, and Nesmith (1997). Indexes are shown for the assets

      included in M2, with additional data at research.stlouisfed.org/msi/index.html.

      Note

      : M1, M2, M3, Bank Credit, and Domestic Nonfinancial Debt are constructed

      and published by the Board of Governors of the Federal Reserve

      System. For details, see

      Statistical Supplement to the Federal Reserve Bulletin,

      tables 1.21 and 1.26. MZM, Adjusted Monetary Base, Adjusted Reserves,

      and Monetary Services Index are constructed and published by the Research

      Division of the Federal Reserve Bank of St. Louis.



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