Understanding the Money Supply

Posted: April 3, 2014 in Debt, Economics, Paper money, Statistics
Tags: , , , , ,

money-pyramid

 

Defining what money consists of in any economy enables the attemp to monitor and control its supply. Money takes varying forms such as physical and electronic (bank deposit, central bank reserves, etc) and so the question on how much money is in circulation will depend on what the user wishes to define as money.

This link gives an overview of the varying definitions of M0 – M4, and anything inbetween. It also shows how a number of countries measure this slightly differently and how their supply has changed over time – all of them seem to be steep ascending mountains (keep in mind Money = Debt)

http://en.wikipedia.org/wiki/M0_(economics)#M0

Useful knowledge to understand some more of the technical aspects of this field. Further research is recommended.

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