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In: Economics

What are included in the monetary indicators (M1, M2, LF, L) provided by the Bank of...

What are included in the monetary indicators (M1, M2, LF, L) provided by the Bank of Korea?
Investigate and visualize the increasing trend of each indicator since 2000.

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Expert Solution

M1and M2 are monetary aggregates set by Bank of Korea and LF and L are  liquidity aggregates.M1=currency in circulation +demand deposits at deposit money banks.M2 refers to M1 plus money market funds, cash management accounts, short term money in trust,securities investment savings account,short term time and savings deposit in national currency, short term foreign currency deposit of non bank financial institutions, certificates of deposit etc.Lf and F are liquidity aggregates and not monetary aggregates as mentioned above .It is the liquidity of financial institutions.

After the crisis of the 90's the economy of Korea had strong growth in 2000 with GDP growth of  9.08 per cent.Monetary indicators increased sharply since 2000.Money supply M1 incresaed to 973571.40KRW in feb2020 from  939624.90KRW billionin jan 2020.M2 incresaed 8.1%in feb 2020.The liquidity of finnacila institutions called Lf increased to 8.3 %in 2019.

Rahul Sunny answered 6 months ago
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