Liquidity: Difference between revisions

Liquidity (view source)

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 M2 is a measure of the U.S. money stock that includes M1 (currency and coins held by the non-bank public, checkable deposits, and travelers' checks) plus savings deposits (including money market deposit accounts), small time deposits under $100,000, and shares in retail money market mutual funds. <ref>https://www.stlouisfed.org/financial-crisis/data/m2-monetary-aggregate#:~:text=M2%20is%20a%20measure%20of,retail%20money%20market%20mutual%20funds.</ref>\
-M2 is closely tied to economic growth, as an increase in the money supply can stimulate spending and investment. And also as an increase in the money supply can lead to higher prices. Recently it has also been important to understand financial conditions, as the exponential growth in M2 helped with assets inflation we saw in the last decade.
+M2 is closely tied to economic growth, as an increase in the money supply can stimulate spending and investment. And also as an increase in the money supply can lead to higher prices. Recently it has also been important to understand financial conditions, as the exponential growth in M2 helped with the asset inflation we saw in the last decade.
 * M2 has decline only a 2.5% since it all time high <ref>https://fred.stlouisfed.org/series/M2SL</ref>