This is an old revision of this page, as edited by RussBot (talk | contribs) at 14:02, 15 February 2006 (Robot: corrected link to disambiguation page Economy (you can help!)). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.
Revision as of 14:02, 15 February 2006 by RussBot (talk | contribs) (Robot: corrected link to disambiguation page Economy (you can help!))(diff) ← Previous revision | Latest revision (diff) | Newer revision → (diff)With reference to the UK economy, the M4 is a definition of the money supply denoting Broad Money, a wide definition of the volume of sterling in the economy, encompassing notes and coin as well as money held in bank accounts. The measure is equivalent to the US M3 (see Money supply for US definitions).
M4 = M0 + UK residents' bank deposits + deposits made by the private sector
Where M0 (Narrow Money) denotes the total of notes and coin in circulation in the economy plus commercial banks' deposits with the Bank of England.
There are several different definitions of money supply to reflect the differing stores of money. Due to the nature of bank deposits, especially time-restricted savings account deposits, the M4 represents the most illiquid measure of money. The M0, by contrast, is the most liquid measure of the money supply.