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Finance Calc Kit
Miscellaneous

Money Supply Calculator

Calculate M0, M1, M2, and M3 macroeconomic money supply measures and monetary expansion.

Monetary base and liquid assets

All amounts in billions of U.S. dollars.

$B
$B
$B
$B

Near money and broad assets

$B
$B
$B
$B

M2 money supply

$19,800.00 B

M2 multiplier: 3.667x of monetary base

Monetary aggregates

AggregateAmount
M0 (Monetary base)$5,400.00 B
M1 (Narrow money)$6,000.00 B
M2 (Standard money)$19,800.00 B
M3 (Broad money)$22,300.00 B

M1 multiplier

1.111x

M1 divided by M0

M2 multiplier

3.667x

M2 divided by M0

M2 composition

M2 total$19,800.00 B
  • Currency$2,200.00 B11.1%
  • Demand deposits$3,000.00 B15.2%
  • Checkable deposits$800.00 B4.0%
  • Savings deposits$11,500.00 B58.1%
  • Small time deposits$1,200.00 B6.1%
  • Retail money market$1,100.00 B5.6%
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What money supply measures tell you

Money supply tracks how much monetary assets exist in an economy at a point in time. Central banks and economists watch M0, M1, M2, and M3 to gauge liquidity, credit availability, and how monetary policy flows through the banking system.

Enter component balances in billions of dollars to compute each aggregate and compare how much narrow money expands relative to the monetary base. To model how faster money growth can affect purchasing power over time, pair this with the inflation calculator. To model required reserves and the fractional-reserve money multiplier at the bank level, use the reserve ratio calculator. To solve the equation of exchange (MV = PY) for velocity, price level, or real output given a money supply figure, use the velocity of money calculator.

Money supply aggregate formulas

Aggregates are built from most liquid to broadest. Each level adds categories that are still relatively easy to convert into spending money.

M0=Currency+Bank ReservesM_0 = \text{Currency} + \text{Bank Reserves}
M1=Currency+Demand Deposits+Checkable DepositsM_1 = \text{Currency} + \text{Demand Deposits} + \text{Checkable Deposits}
M2=M1+Savings+Small Time Deposits+Retail Money MarketM_2 = M_1 + \text{Savings} + \text{Small Time Deposits} + \text{Retail Money Market}
M3=M2+Institutional Money MarketM_3 = M_2 + \text{Institutional Money Market}

The monetary multipliers compare broader money to the base:

M1 Multiplier=M1M0\text{M1 Multiplier} = \frac{M_1}{M_0}
M2 Multiplier=M2M0\text{M2 Multiplier} = \frac{M_2}{M_0}

Worked example

Suppose currency in circulation is $2,200 billion, central bank reserves are $3,200 billion, demand deposits are $3,000 billion, and other checkable deposits are $800 billion. Savings are $11,500 billion, small time deposits are $1,200 billion, retail money market funds are $1,100 billion, and institutional money market balances are $2,500 billion.

  • M0 = 2,200 + 3,200 = $5,400 billion
  • M1 = 2,200 + 3,000 + 800 = $6,000 billion
  • M2 = 6,000 + 11,500 + 1,200 + 1,100 = $19,800 billion
  • M3 = 19,800 + 2,500 = $22,300 billion
  • M1 multiplier = 6,000 / 5,400 = 1.111x
  • M2 multiplier = 19,800 / 5,400 = 3.667x

How to read each aggregate

  • M0 (monetary base): Physical currency plus reserves banks hold at the central bank. Also called high-powered money because it anchors the banking system.
  • M1 (narrow money): Assets used directly for transactions, mainly cash and checking balances.
  • M2 (standard money): M1 plus near-money items such as savings accounts, small certificates of deposit, and retail money market funds.
  • M3 (broad money): M2 plus larger institutional balances that are less liquid but still part of the financial system. The Federal Reserve stopped publishing M3 in 2006, but the concept remains useful for classroom and policy analysis.

Frequently asked questions

What is the difference between M1 and M2?
M1 covers money ready for immediate spending, such as cash and checking accounts. M2 adds savings, small time deposits, and retail money market funds that can be converted to cash quickly but are not used for everyday transactions.
Why is M0 called high-powered money?
M0 is created directly by the central bank and forms the reserve foundation of the banking system. Through fractional reserve lending, commercial banks can expand deposits on top of that base.
Does increasing money supply cause inflation?
According to the quantity theory of money (M x V = P x Y), faster growth in money supply (M) relative to real output (Y) can raise prices (P) when velocity (V) is stable. The relationship is not one-to-one in the short run because velocity and output also shift.
What units should I enter?
Enter all balances in billions of U.S. dollars. For example, type 2200 for $2.2 trillion of currency in circulation.
Are the results stored?
No. All calculations run in your browser. Nothing is sent to the server.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.