Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
M1 is the total estimated amount of specie plus immediately available funds.

M2 is M1 plus time related deposits.

M3 is the total estimated (WAG) amount of a currency in existence in any form.

The CB can interject extra money into the system at each of the 3 levels although the national Treasury and Mint usually have oversight and control of M1.  Whether a CB uses M2 or M3 depends on the policies (goals) and the situational analysis and decision making processes of the various CBs.  

(And you thought I couldn't drag in Epistemology, huh?  :-)  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sun Jun 25th, 2006 at 01:11:13 PM EST
[ Parent ]
If my way of giving you a loan is to open an account for you with a balance of $100M, doesn't that increase the amount of "currency in existence in any form" without CB involvement?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Jun 25th, 2006 at 01:22:51 PM EST
[ Parent ]


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