monetary base

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Monetary base

Sum of the currency held by the public and reserves held by financial institutions with the Federal Reserve Banks. This is the monetary aggregate that the Federal Reserve has control over through its monetary policy. Also called High Powered Money because the effect of changes in monetary base on money supply is magnified by the money multiplier.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

monetary base


high-powered money

that part of the MONEY SUPPLY that is directly

under the control of a country's CENTRAL BANK. In the UK this consists of CURRENCY (BANK NOTES and COINS) in circulation plus commercial banks’ TILL MONEY and their operational balances at the BANK OF ENGLAND - equal to the ‘M0‘ definition of money. See MONEY SUPPLY DEFINITIONS, MONETARY POLICY.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
There, Finney cited theories of competitive free banking to describe a scenario in which Bitcoin is the '"high-powered money' that serves as a reserve currency for banks that issue their own digital cash....
By the way, they also need to have a constant or predictable money multiplier (m), i.e., the ratio of the broad money supply (M) to high-powered money (H), which is mostly bank reserves under their control.
Under a pure fiat money system, dominated by a hegemon, identification of monetary disorder becomes more hazardous especially where high-powered money (an alternative term for the monetary base) has become essentially removed from the pivot of the monetary system.
More generally, international liquidity comprises the liabilities of OECD countries' central banks (their "high-powered money"), those countries' AAA-rated and AA-rated central-government bonds, the debt securities of supranational organisations like the World Bank and regional development banks, and gold in official and private hands.
State money is the high-powered money that is produced by central banks.
The key monetary framework of EMU-2 would be a "monetary authority separate from government" but "tightly subject to constitutional rules" that would "strictly limit the growth of high-powered money" to ensure "price level stability over the very long run" but with "considerable scope for price level fluctuations over the short and medium run" (p.
In comparison, for dollars, the Federal Reserve determines the amount of high-powered money that is produced (currency plus bank reserves), which ultimately determines the total number of dollars in the world.
The first rejects Keynes' theories of liquidity preference, the second reinstates them while for the Circuitists the Central Bank's issue of 'high-powered money' is the critical mechanism in regulating liquidity (p76).
Appendices Table A-1 Measures of Seigniorage Variables Description Monetary Base Reserve money (line 14 in IFS) (or high-powered money) Seigniorage l: Ratio of the change in high powered money to nominal GDP (Fischer 1982) Seigniorage 2: Ratio of high-powered money to nominal GDP in current period minus ration of high-powered money to nominal GDP in last period plus the product of the ratio Of high powered money to nominal GDP in last period times the growth rate of nominal GDP In current period to one plus the growth rate of GDP in current period (Walsh 1998).
The policy framework has changed throughout transition, from broad money targeting (1990-1996) to high-powered money targeting (1997-2005), and then to inflation targeting (August 2005).
By increasing the stock of high-powered money, the open-market purchase drives down nominal and real interest rates, and so increases consumption and investment.

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