Money supply , or money supply , is a combination of cash in circulation and non - cash funds in accounts held by individuals and legal entities and the state [1] [2] .
Content
Money aggregates
Indicators of the structure of the money supply are monetary aggregates . Monetary aggregates are the types of money and cash that differ from each other in the degree of liquidity (the ability to quickly turn into cash).
Monetary aggregates are a hierarchical system - each subsequent aggregate includes the previous one.
In different countries, monetary aggregates of different composition are allocated. The IMF calculates the common indicator M1 for all countries and the broader indicator of “quasi-money” (urgent and savings bank accounts and the most liquid financial instruments circulating on the market ) [1] .
The Central Bank of the Russian Federation calculates monetary aggregates M0, M1, M2, M3 [1] :
- M0 = cash in circulation (coins, banknotes).
- M1 = M0 + checks , demand deposits (including bank debit cards ), balances in national currency on the settlement accounts of organizations, current and other accounts on demand of the population, non-financial and financial (except credit) organizations.
- M2 = M1 + term deposits .
- M3 = M2 + savings deposits , certificates and government bonds.
In a number of countries, M4 is additionally distinguished. For example, in the UK, M4 includes the amount of cash in circulation, the total amount of loans issued by banks, as well as the amount of government borrowing. [3]
Money structure
The structure of the money supply is constantly changing. In the modern monetary system, the growth rate of the money supply has significantly decreased and money has begun to work better. In the Russian Federation, out of the shortcomings of the monetary system, a large share of cash can be noted (22% in 2014), when in developed countries this figure barely reaches 7-10%. The ratio between aggregates varies depending on economic growth .
The change in the volume of money supply is the result of the influence of two factors:
- change in the mass of money in circulation;
- change in the speed of their turnover .
Monetization Rate
An important indicator of the state of the money supply is the monetization coefficient (also known as financial depth ), equal to the ratio of M2 to gross domestic product . This indicator allows you to answer the question about the sufficiency of money in circulation. The optimal level of monetization for a developed country is considered to be at least 56-60%, a low level of monetization of the economy can inhibit foreign economic development [4] .
Money aggregates in Russia
The Central Bank of the Russian Federation calculates monetary aggregates M0 and M2. M2 unit represents the amount of cash in circulation (outside banks) and balances in national currency on the accounts of non-financial organizations, financial (except credit) organizations and individuals who are residents of the Russian Federation . The table below shows the monetary aggregate M2 (in billion rubles ) in different years since 2000 [5] .
| date | Cash (M0) | % of M2 | Cashless funds | % of M2 | Total amount (M2) |
|---|---|---|---|---|---|
| 01/01/2000 | 266.1 | 37.24% | 448.4 | 62.75% | 714.6 |
| 01/01/2001 | 418.9 | 36.41% | 731.7 | 63.59% | 1,150.6 |
| 01/01/2002 | 583.8 | 36.27% | 1,025.6 | 63.73% | 1,609.4 |
| 01/01/2003 | 763.2 | 35.82% | 1,367.3 | 64.18% | 2 130,5 |
| 01/01/2004 | 1,147.0 | 35.79% | 2 058.2 | 64.21% | 3 205,2 |
| 01/01/2005 | 1,534.8 | 35.25% | 2 819.1 | 64.75% | 4 353,9 |
| 01/01/2006 | 2,009.2 | 33.31% | 4,022.9 | 66.69% | 6,032.1 |
| 01/01/2007 | 2 785,2 | 31.05% | 6 185.6 | 68.95% | 8 970.7 |
| 01/01/2008 | 3 702,2 | 28.77% | 9 166.7 | 71.23% | 12 869.0 |
| 01/01/2009 | 3,794.8 | 29.24% | 9,181.1 | 70.76% | 12 975.9 |
| 01/01/2010 | 4,038.1 | 26.45% | 11,229.5 | 73.55% | 15,267.6 |
| 01/01/2011 | 5,062.7 | 25.30% | 14 949.1 | 74.70% | 20 011.9 |
| 01/01/2012 | 5 938.6 | 24.26% | 18 544.6 | 75.74% | 24,483.1 |
| 01/01/2013 | 6,430.1 | 23.46% | 20 975.3 | 76.54% | 27,405.4 |
| 01/01/2014 | 6 985.6 | 22.24% | 24,419.1 | 77.76% | 31,404.7 |
| 01/01/2015 | 7 171.5 | 22.33% | 24,939.1 | 77.67% | 32 110.5 |
| 01/01/2016 | 7,239.1 | 20.22% | 28 570.1 | 79.78% | 35,809.2 |
| 01/01/2017 | 7 715 | 20.1% | 30,703 | 79.9% | 38,418 |
| 01/01/2018 | 8,446 | 19.9% | 33,994 | 80.1% | 42,440 |
Monetary aggregates in the UK
Monetary aggregates in the UK [6] [1] :
- M0 - banknotes and coins in circulation + cash in banks + bank balances with the Bank of England
- M1 - banknotes and coins in circulation + funds on current and deposit accounts of the private sector , which can be transferred by check
- M2 - banknotes and coins in circulation + interest-free bank deposits + deposits of construction companies + accounts of the National Savings System
- M3 - M1 + all other private sector bank deposits + certificates of deposit
- M4 - M1 + most of the private sector bank deposits + deposits / holdings of money market instruments (the amount of cash currency in circulation, the total amount of loans issued by banks, as well as the amount of government borrowing [3] ); aggregate M4 characterizes private sector liquidity
Money supply M1 in different countries as of June 2007
| A country | Money supply (M1) per 1 resident in Russian rubles * |
|---|---|
| Tajikistan | 239 rub (perhaps one zero is lost in the data on the website of the National Bank of the Republic of Tatarstan) |
| Afghanistan | 1 218 rub. |
| Mongolia | 3 852 rub. |
| Kyrgyzstan | 4 480 rub. |
| Georgia | 4 924 rub. |
| Moldova | 5 250 rub. |
| Armenia | 7 031 rub. |
| Azerbaijan | 7 402 rub. |
| Mexico | 9 248 rub. |
| Brazil | 9 411 rub. |
| Macedonia | 10 215 rub. |
| Kazakhstan | 22 077 rub. |
| Romania | RUB 28,099 |
| Ukraine | 30 126 rub. |
| Bulgaria | 38 722 rub. |
| Russia | About 40,000 rubles. (estimated data, data on the value of M1 are not available) |
| Poland | 66 016 rub. |
| Latvia | 73 770 rub. |
| Lithuania | 75 882 rub. |
| Estonia | 132 233 rub. |
| Sweden | 618 131 rub. |
| Norway | 635 611 rub. |
| Denmark | 662,264 rub. |
| Iceland | 940 055 rub. |
(* Data on the money supply M1 was taken from the websites of the Central (National) banks of the respective countries. The number of population of the countries was taken from open sources on the Internet.)
See also
- Money base
- Money multiplier
- Money market
- Liquidity preference
Notes
- ↑ 1 2 3 4 New Economic Dictionary / Edited by A. N. Azrilliyan. - M .: Institute of the New Economy , 2006. - 1,088 p. - 4,000 copies. - ISBN 5-89378-014-0 .
- ↑ Parkhomenko A.V., Pchelintsev A.N. Finance statistics : Textbook. - GOU VPO "Tambov State Technical University" (TSTU), 2010. ISBN 978-5-8265-0897-8
- ↑ 1 2 Money aggregate M4 Archival copy of April 13, 2014 on Wayback Machine // RBC
- ↑ Andrianov V. The ruble zone is real // Banks and the business world. 2009. N 8.P. 30-31.
- ↑ Unit M2 . - The Central Bank of the Russian Federation . Date of treatment February 11, 2015.
- ↑ Monetary aggregates in the UK . - Dictionary "Finam". Date of appeal April 27, 2010. (unavailable link)
Literature
- Money aggregates / L. N. Krasavina // Big Russian Encyclopedia : [in 35 vol.] / Ch. ed. Yu.S. Osipov . - M .: Great Russian Encyclopedia, 2004—2017.