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money supply

money supply

Money supply is an important economic indicator?, which is closely watched in the setting of monetary policy. The amount of "money" in an economy, however, depends on what is being counted as money. Hard currency makes up only a small percentage of what most people think of as money "on hand" - the difference is between what is carried in a wallet vs. what is kept in a bank account. As a further complication - money is often placed in bank accounts as a result of loans, so the availability of credit is an increasingly dominating factor in determining the money supply. In the long run, the central bank has no control over the amount of money in an economy, only the amount of currency or monetary base. In general, policymakers only observe the changes in the money supply as a statistical indicator of general economic performance, they try to influence the interest rate? rather than the money supply itself. For more about the money supply and how it is measured, see wikipedia.


economic policy, money, GDP, inflation,unemployment, Bank of Canada

Position:Alan Greenspan isn't the "Maestro." He's Oz.

By John P. Hussman(external link) "The Federal Reserve is irrelevant. We don't just mean ineffective, though that is certainly likely to be true here. Rather, because of a change in the application of reserve requirements over the past decade, Fed actions have virtually zero impact on lending activity in the U.S. banking system."

peg the growth of the money supply to inflation.

[+] Position: (title of position)

Sources and Resources

money supply - wikipedia. Bank of Canada(external link) - backgrounder on Canada's Money Supply

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