Economics at your fingertips  

Monitoring money: should bond funds be added to M2?

John Duca

Southwest Economy, 1993, issue Jun, No Special Issue, 8 pages

Abstract: One explanation for the unusually slow growth of M2 is that people shifted from bank deposits to higher yielding bond mutual funds. This possibility raises the question of whether the addition of bond funds to M2 would give policymakers a more accurate view of what is happening in the economy. To find the answer, I review why the money supply has been used as an indicator of nominal gross domestic product, explain why declines in bank competitiveness have led to episodes of missing money and describe bond funds. This discussion provides a basis for examining results from modeling M2 with and without bond funds. The major policy implication of this research is that a measure of M2 that includes bond funds should be monitored.

Keywords: Monetary policy; Money supply; Bonds; Mutual funds (search for similar items in EconPapers)
Date: 1993
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in Southwest Economy from Federal Reserve Bank of Dallas Contact information at EDIRC.
Bibliographic data for series maintained by Amy Chapman ().

Page updated 2019-08-15
Handle: RePEc:fip:feddse:y:1993:i:jun:p:1-8:n:specialissue