Question
In: Economics
what share of M1 money is actual currency?
what share of M1 money is actual currency?
Solutions
Expert Solution
In M1 money there is bank demand deposits and currencies and coins in circulation. Here I am presenting data of US about the M1 measures: from November 2018 to March 2020(in billions of dollars)
| Date | Currency( (1) | Traveller's checks (2) | Demand deposits (3) | Other checkable deposits | ||||
| At commercial banks (4) | At thrift institutions (5) |
Total other checkable deposits (6)=(5)+(4) |
total M1 (1)+(2)+(3)+(6) |
share of currency in M1 currency/total M1 |
||||
| Month | ||||||||
| Nov. 2018 | 1619.1 | 1.7 | 1451.4 | 332.4 | 293.4 | 625.9 | 3698.1 | 0.437819 |
| Dec. 2018 | 1624.8 | 1.7 | 1492.9 | 333.4 | 293.7 | 627.1 | 3746.5 | 0.433685 |
| Jan. 2019 | 1630.6 | 1480.2 | 343.8 | 285.9 | 629.8 | 3740.6 | 0.435919 | |
| Feb. 2019 | 1633.5 | 1498.1 | 341.8 | 286.2 | 628 | 3759.6 | 0.434488 | |
| Mar. 2019 | 1637.2 | 1458.3 | 342.8 | 291.6 | 634.4 | 3729.9 | 0.438939 | |
| Apr. 2019 | 1645.2 | 1487.9 | 353.6 | 294.3 | 647.9 | 3781 | 0.435123 | |
| 43586 | 1650.8 | 1493.8 | 353.7 | 294.1 | 647.9 | 3792.5 | 0.43528 | |
| 43617 | 1657.8 | 1527.1 | 351.6 | 296.3 | 647.9 | 3832.8 | 0.43253 | |
| 43647 | 1666.6 | 1534.6 | 361.5 | 295.5 | 657 | 3858.2 | 0.431963 | |
| Aug. 2019 | 1674.3 | 1521.1 | 358.1 | 299.8 | 658 | 3853.4 | 0.434499 | |
| Sept. 2019 | 1685 | 1553.8 | 364.4 | 300.1 | 664.5 | 3903.3 | 0.431686 | |
| Oct. 2019 | 1693.4 | 1562.8 | 365 | 301.8 | 666.8 | 3923 | 0.431659 | |
| Nov. 2019 | 1703.4 | 1579.6 | 362.6 | 302.1 | 664.7 | 3947.7 | 0.431492 | |
| Dec. 2019 | 1710.9 | 1591.8 | 367.2 | 307.1 | 674.4 | 3977.1 | 0.430188 | |
| Jan. 2020 | 1720.8 | 1582.4 | 364.7 | 309.2 | 673.9 | 3977.1 | 0.432677 | |
| Feb. 2020 | 1723.6 | 1608.7 | 367.7 | 309.7 | 677.4 | 4009.7 | 0.429858 | |
| Mar. 2020 | 1744.8 | 1825.6 | 377.5 | 319.8 | 697.3 | 4267.7 | 0.408838 |
source: table 3, https://www.federalreserve.gov/releases/h6/current/default.htm
hence from the recent data of USA fed reserves we can say that the share of currencies in M1 is staying between 40-44% range.
Please note: I am assuming you are from the US and asking about US M1 measures. If you are asking about any other country please let me know in the comments and I'll provide you with such data accordingly.
Thanks
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