M1 was certainly distinctly money before WWI, and at least in the US, even in the 50's many retail and commercial enterprises relied heavily on overdraft lines of credit, leaving a substantial distinction between cheques and saving accounts ... but today, whether the wage bill is coming out of retained earnings or is financed, it spends very little time in the cheque account of the employer, making the distinction between M1 and M2 mostly useful for tracing out things like how hard banks have to work to get deposits into CD's and other lower-reserve accounts in order to free up the reserves to issue loans.

So M2 as a percentage of M3, M3 ex M2 as a percentage of M3, and M1 as a percentage of M2 as a secondary indicator of what's going on.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.