Narrow Money


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Narrow Money

A measure of the money supply used by the various central banks that includes only currency in circulation and very near money instruments. In the Federal Reserve System, narrow money includes all physical currency and deposits in checking accounts as well as Negotiable Orders Withdrawal accounts. It does not include savings accounts, certificates of deposit, or money market accounts. This is called narrow money because it applies the most restrictive definition of money. It is also called the money base. See also: M1, M0.
References in periodicals archive ?
There is evidence that the interest rate and exchange rate reform has significant positive impact on both narrow money and broad money demand.
Both narrow and broad definitions of money supply are used in the evaluation of the money supply--inflation relationship because of the following reason: the practice of money targeting in the past showed that institutional change and financial innovation related to payment systems has caused instability in the relationship between narrow money M1 and prices due to shifts in money velocity.
Narrow Money Supply, or M1, which is physical money such as coins, currency and deposits, has increased 73 percent, or more than one trillion dollars.
But Berenberg Bank said that, thanks to the ECB, the 17-nation bloc was close to an inflection point; rebounding growth in narrow money pointed to renewed growth by spring at the latest.
After estimating the parameters of the long-run demand functions for narrow money, we assess the welfare losses associated with different rates of inflation quantitatively.
By protecting depositors, federal deposit guarantees would prevent runs and provide for the stability of the payments system because demand deposits had become an increasingly important part of the narrow money supply--that is, money held largely for transactions purposes--the equivalent of Ml (coin and currency, checkable deposits, and travelers checks) today.
Narrow money supply (M1) on the other hand edged up slightly to end the year up 3.
The report predicts that by the end of 2010, M2, the indicator of broad money supply, will increase 17 percent to 19 percent and M1, which represents narrow money supply, will increase 20 percent to 22 percent.
M1 represents the narrow money supply but it is made up of cash in circulation plus checking account deposits, something quite different than M0.
2006 C2, credit from domestic sources 2 544 14,8 C2, households 1 534 12,8 C2, non-financial enterprises 832 20,7 C2, local government 179 6,6 Total credit from domestic and 2 982 13,8 foreign sources, C3 (1) Narrow money M0 66 -25,2 Broad money M2 1 178 11,9 M2, households 663 5,7 M2, non-financial enterprises 392 33,6 Growth last 12 months.
This article focuses on the role of sweep programs in properly measuring narrow money.
Invariably, such models also fail to draw a distinction between narrow money (bank reserves) and broad money (bank deposits) and rule out, by assumption, financial frictions that may be important for understanding the role of financial intermediation in the economy.