strsubcodechain Monetary Aggregates - Data and Methods
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Subjects > Monetary Aggregates

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Subject: Monetary aggregates and their components

Direct source
Monetary aggregates are compiled by central banks on the basis of surveys of monetary and financial institutions.

Source Periodicity
Monetary aggregates are cumulative monthly stock figures.

Contact person
OECD statistics contact:

Geographic coverage
The OECD does not collect monetary aggregates for European countries that are part of the Euro area; aggregated figures for the Euro area are therefore taken from the European Central Bank.

Key statistical concept
Monetary aggregates measure the amount of money circulating in an economy. National series are loaded into MEI as national currency stock series. Mostly, these are end-of-month. A few countries compile data more frequently e.g. weekly which enables them to calculate “average for the month” data. Series are also presented in index form, calculated by OECD.

Monetary aggregates are always expressed in current price (“nominal” terms) because the amount of money required by an economy reflects current levels of economic activity and price. In MEI, they are presented both as stock series in national currency and as indices in the OECD standard base year.

There are many monetary aggregates. Statistically, they are items in the balance sheet of the banking system. They may be taken from either side (since credit series, which are banking assets, are sometimes labeled monetary aggregates) but are normally taken from the liabilities side. In the balance sheet the liabilities items are ordered, starting with very narrow definitions of money (such as notes and coin) and gradually widening through various types of bank accounts (e.g. sight deposits, term deposits) to very board items which include sophisticated products like financial derivatives.

In other words, narrow money measures cover highly liquid forms of money (money as a means of exchange) while broad money includes the less liquid forms (money as a store of value). There were no internationally recognised standards for compiling monetary aggregates until the IMF published its Monetary and Financial Statistics Manual in 2000 ( Cross-country comparability suffered as a result.

Now, notably, the European Central Bank’s framework for constructing Euro area monetary aggregates is consistent with IMF principles and non-euro EU countries are also required to report data to ECB according to the framework as are EU candidate countries as part of their application process. A useful IMF link for national methodologies is .

In MEI, a general definition of narrow money – M1 is: currency i.e. banknotes and coins, plus overnight deposits. M2 is: the sum of M1, deposits with an agreed maturity of up to two years and deposits redeemable at notice of up to three months. And broad money – M3 is: the sum of M2, repurchase agreements, money market fund shares/units and debt securities up to two years.

Glossary Terms: M1 (Narrow money), Monetary aggregates

Other manipulations
The narrow and broad money indices are calculated by OECD from the national stock series. Country indices are calculated by first estimating period averages where the country only supplies end-of-period stock data. The figure for the end of the previous period is taken as the opening stock for the current period. The arithmetic average of the two is the estimate for the period average. These, or true monthly averages where available, are divided by the annual average of the monthly data in the base period to obtain the index.

Recommended uses and limitations
Monetary aggregates are monitored by analysts because they measure the amount of money an economy currently needs. This means they reflect the state of that economy in terms of current activity and price levels. The modern model, “inflation targeting”, is for governments to “contract out” inflation control by explicitly setting the central bank this task. The central bank uses key policy “directive” interest rates as its main tool to lever the financial sector’s actions. Here, the levels of the money stock are seen as outcomes of policy decision, not tools in themselves and monetary aggregates take on lower importance. In many countries monetary aggregates became some of the most important and widely used government data in economic and financial research, not least because of the influence of monetarist thinking on macroeconomic policies in the 1980s. Relationships among monetary measures and other macroeconomic variables are studied in order to describe and to forecast changes in economic activity, interest rates and inflation. However, developments in financial markets, including financial deregulation and innovation, and major tax and interest rate changes, have altered the demand for money (and credit) and thus affected linkages to other economic variables such as income, employment and prices. As a consequence, for some analyses there has been a movement away from monetary aggregates towards a greater focus on more structural indicators. At times, governments have attempted to control the economy, particularly changes in price levels (.i.e. inflation) by directly limiting the money supply. A good example is the German Bundesbank prior to European Monetary Union. In such a scenario, inflation is controlled indirectly and monetary aggregates are key policy statistics.

Quality comments
Monetary aggregates are also referred to as money supply or money stock series. This is because they measure the amount of money “supplied” to an economy to satisfy its current monetary needs and since the data are taken from the liabilities side of the consolidated balance sheet of the banking system, they are “stock” (rather than “flow”) measures.

Subject: Broad money and components

Key statistical concept
Broad money is the sum of M2, repurchase agreements, money market fund shares/units and debt securities up to two years.

Subject: Broad money and components
Measure: Index publication base SA

Unit of measure used


Reference period

Subject: Monetary aggregates and their components > Narrow money and components

Key statistical concept
Narrow money M1 is: currency i.e. banknotes and coins, plus overnight deposits.

Subject: Narrow money and components
Measure: Index publication base SA

Unit of measure used


Reference period