Invest FAQ   
Articles
   index
previous
next
full text 
Browse
the bookshelf
Join
the email list
Surf
invest links
Tour
for beginners
for investors
for traders
About
what is it?
what's new?
contributors
contact
Search

Sharebuilder

Subject: Regulation - Money-Supply Measures M1, M2, and M3

Last-Revised: 4 Jan 2002
Contributed-By: Ralph Merritt

The US Federal Reserve Board measures the money supply using the following measures.

M1
Money that can be spent immediately. Includes cash, checking accounts, and NOW accounts.
M2
M1 + assets invested for the short term. These assets include money- market accounts and money-market mutual funds.
M3
M2 + big deposits. Big deposits include institutional money-market funds and agreements among banks.

The pamphlet "Modern Money Mechanics," which explains M1, M2, and M3 in gory detail, was once available free from the Federal Reserve Bank of Chicago. That pamphlet is no longer in print, and the Chicago Fed apparently has no plans to re-issue it. However, electronic copies of it are out there, and here's one:
http://landru.i-link-2.net/monques/mmm2.html

Previous article is Regulation: Full Disclosure
Next article is Regulation: Federal Reserve and ..
Category is Regulation
Index of all articles


The Investment FAQ is copyright © 2010 by Christopher Lott.
Please read the terms of use, disclaimer, and privacy statements.