what the heck is broad and narrow money?

July 26, 2006 5:57 PM

When economists talk about broad- and narrow-money, what exactly are they talking about?
posted by dobie to Work & Money (2 answers total)

Best answer: Different ways of measuring the money supply.

linky
posted by pompomtom at 6:07 PM on July 26, 2006

Best answer: Money supply is divided usually into 3 or 4 levels of classification. M0, M1, M2 and sometimes M3. M0 for instance is just currency whereas M1 is currency and checking accounts, M2 is currency, checking and savings and some CDs, and M3 is almost all money accounts that are liquid in the short to medium run.

M0 = narrow
M3 = broad
posted by jckll at 7:36 PM on July 26, 2006