Money stock

Money aggregates tendencies:
M1 and M2 stock studies
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Money aggregates tendencies: M1 and M2 stock studies
M1 and M2 used to be the key money aggregate indicators for the monetary policy. The M1 aggregate that used to be the head indicator in the times of monetarist rule in the Fed consists of the most liquid components of money, i.e., cash and money on the current accounts. This money can be used immediately in most of the transactions and thus have an aggressive nature, at the same time the accumulation of this aggregate can occur only due to money emission of the regulator.
M2 aggregate is less liquid than M1. It constitutes all the M1 aggregate and short-term deposits. The latter have less liquid nature as their immediate withdrawal is limited and is subject to fines. Also, the M2 aggregate constantly grows as deposits have their accumulation rate.
The analysis of both aggregates in the Fed system, according to the data provided by Federal Reserve Bank of Saint-Louis on its website demonstrates a tendency towards increasing grows of the both aggregates. The M1 aggregate is growing with the increasing speed, and this tendency may be seen as a geometric progression. The fastest growth occurred after the Great Recession as M1 aggregate doubled during the period from 2010 till now (FRED, 2018).
The M2 aggregate grows with slower speed and is seen as a simple arithmetic progression. The double increase in modern values of M2 aggregate occu…