Money supply 1871-2006

By Rodney Edvinsson

This section presents data on money supply and its components. The money supply represents the degree of liquidity circulated in the economy. It is defined as the possessions of dept instruments of the money issuing sector by the money holding sector. Exactly what items that should be included, however, is not given and there are several definitions of money supply.

The Riksbank presents monthly data on M0 and M3 back to 1961. Up to December 2005 series were presented of M0, M3 and M3+. M0 was defined as notes and coins outside the bank sector, while M3 was equal to M0, bank deposits and bank certificates. The total deposits included deposits in commercial banks, savings banks and cooperative banks (credit associations up to 1973). Before July 1st 1974 deposits in Postbanken/Postsparbanken (including the postgiro) were also included, while after that date the newly formed PK-banken was defined as a commercial bank. M3+ was equal to M3 and the Swedish public’s holdings of Treasury bills.

As of 2006, the Riksbank applies new definitions of various credit and monetary aggregates. Because of the problem to apply the new definition before 1998, not least because financial institutes outside of the bank sector are included, the series of M0 and M3 in this study is based on the old definitions of Statistics Sweden. Direct data on coins in circulation exist back to 1939. Coins in circulation before 1939 are calculated from minting statistics with the assumption of a very small rate of depreciation.