M1 vs M0 in an instant payments world
Manmohan Singh explains how measurement of ‘narrow’ money is changing
The money supply denoted by M0 is relatively straightforward. Reserve accounts of banks at the central bank would be M0, plus cash-in-circulation. By definition, M0 means central bank money (ie, a liability on the central bank balance sheet). M1 includes the cash component of M0, and also includes depositories or banking system monies with no tenor (ie, instant payments).
It is important to note that private sector payment systems like Euro1 (Euro area), Fnality (GBP) or Chips (USD) act as agents
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