Monetary Aggregates

Monetary aggregates are measurements that track the total amount of money circulating in an economy. They help economists and policymakers understand the supply of different types of money, such as cash, checking deposits, and savings accounts. These aggregates are categorized into levels, like M1, M2, and M3, with each including broader types of money. Monitoring these figures helps assess economic activity, inflation, and the effectiveness of monetary policy. In essence, monetary aggregates provide a snapshot of how much liquidity—available money—is present in the economy at any given time.