re: "While commercial bank deposits don’t map perfectly into M2, they are close"
Maybe you never wondered why the FED's data on St. Louis' FRED doesn't balance? Aren't loans supposed to equal deposits (plus currency)? Or bank credit equal to total assets?
Well, the DIDMCA of March 31, 1980 turned 38,000 nonbanks into banks, adding the S&Ls, the MSBs, and the CUs to the member DFIs. But the BOG didn't change their definitions on the asset side of the ledger. It did incorporate deposits on the liability side of the ledger (minus large CDs and MSB interbank deposits).
Exciting that this is up and running!
Wonder why everybody assume money will in the end go into goods and services. Imagine some of these MZM going into investments into risky assets...
re: "Money velocity therefore reached a peak around 3.6 in 1980"
No, income velocity peaked along side transaction's velocity in the 2nd qtr. 1981
re: "While commercial bank deposits don’t map perfectly into M2, they are close"
Maybe you never wondered why the FED's data on St. Louis' FRED doesn't balance? Aren't loans supposed to equal deposits (plus currency)? Or bank credit equal to total assets?
Well, the DIDMCA of March 31, 1980 turned 38,000 nonbanks into banks, adding the S&Ls, the MSBs, and the CUs to the member DFIs. But the BOG didn't change their definitions on the asset side of the ledger. It did incorporate deposits on the liability side of the ledger (minus large CDs and MSB interbank deposits).
re: "Money velocity therefore reached a peak around 3.6 in 1980"
Not so. https://monetaryflows.blogspot.com/2010/07/monetary-flows-mvt-1921-1950.html
Preach!