Historical M2 vs M3
Does the more rapid growth of M3 over M2 signify anything ?
See also: Changes in M1, M2, and M3 over Time
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I think the strange thing is that M3 was such a small part of the money supply for so long! According to the Fed, M3 is M2 plus institutional money funds and certain managed liabilities of depositories, namely large time deposits, repurchase agreements, and Eurodollars.
Since Eurodollars includes dollar-denominated bank accounts held in China, Russia, Saudi Arabia, etc., that is probably a big and growing component. The growth of the repo market is another. According to this article:
the repo market is the "biggest financial market today". I always thought it was currencies though.
Posted by: Andy | Nov 14, 2005 5:33:36 PM
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