Monetary Aggregates and Their Components: Broad Money and Components: M3 for United States (2024)

FAQs

What is the M3 monetary aggregate? ›

Monetary aggregates background

M3 is the sum of M2, repurchase agreements, money market fund shares/units and debt securities with a maturity of up to two years.

M3 is a measure of the money supply that includes M2 as well as large time deposits, institutional money market funds, short-term repurchase agreements (repo), and larger liquid assets.

Definition of. Broad money (M3) Broad money (M3) includes currency, deposits with an agreed maturity of up to two years, deposits redeemable at notice of up to three months and repurchase agreements, money market fund shares/units and debt securities up to two years.

In the United States, the monetary aggregates are labeled as: M0: Paper money and coin currency in circulation, plus bank reserves held by the central bank; it's also known as the monetary base. M1: All of M0, plus traveler's checks and demand deposits. M2: All of M1, plus money market shares and savings deposits.

M3: M1 plus all other bank deposits from the private non-bank sector, plus bank certificate of deposits, less inter-bank deposits. Broad money: M3 plus borrowings from the private sector by NBFIs, less the latter's holdings of currency and bank deposits.

The cubic metre (in Commonwealth English and international spelling as used by the International Bureau of Weights and Measures) or cubic meter (in American English) is the unit of volume in the International System of Units (SI). Its symbol is m³. It is the volume of a cube with edges one metre in length.

M3 is broad money. M3 = M1 + Time deposits with the banking system. M2 = M1 + Savings deposits of post office savings banks.

The most commonly used measure of money supply that is also referred to as Aggregate Monetary Resources is M3. M3, sometimes referred to as broad money, includes: All physical money such as coins and currency along with the deposits in the central bank (known as M0) The deposits in the commercial banks (known as M1)

US M2 Money Supply is at a current level of 20.87T, up from 20.84T last month and up from 20.74T one year ago. This is a change of 0.12% from last month and 0.59% from one year ago.

The M3 money is also known as broad money. The M3 money includes assets that are less liquid than other components of money supply.

What is the purpose of monetary aggregates? ›

A monetary aggregate is a formal accounting method for money, such as cash or money market funds. Money supply in a country is measured using monetary aggregates. The monetary base is an aggregation of the total supply of money in circulation plus the central bank's held part of commercial bank reserves.

The U.S. monetary system is a decimal system, with one dollar equal to one hundred cents. One dollar is written as $1 or $1.00, and one cent is written as 1¢.

M1, M2 and M3 are measurements of the United States money supply, known as the money aggregates. M1 includes money in circulation plus checkable deposits in banks. M2 includes M1 plus savings deposits (less than $100,000) and money market mutual funds. M3 includes M2 plus large time deposits in banks.

M3 is broad money. M3 = M1 + Time deposits with the banking system. M2 = M1 + Savings deposits of post office savings banks. M1 = Currency with public + Demand deposits with the Banking system (savings account, current account).

M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less individual retirement account (IRA) and Keogh balances at depository institutions; and (2) balances in retail money market funds (MMFs) less IRA and Keogh balances at MMFs.

They are M0, M1, M2, and M4.