The Goldilocks Measure of UK Monetary Aggregates: An Introduction to MA
37 Pages Posted: 6 Jun 2014
Date Written: May 27, 2014
The 2008/09 financial crisis and subsequent recession has created renewed attention to UK monetary aggregates. This discussion paper argues that although measures of the money supply are crucial to understanding the economy, existing approaches are flawed: "Notes and Coin" is too narrow, and M4 is too broad. An alternative measure that is based on the Austrian school approach to the definition of money (MA) is proposed.
Keywords: asset bubble, credit creation, liquidity, monetary policy, money supply
JEL Classification: B53, E41, E51, E52
Suggested Citation: Suggested Citation