Money supply

The money supply, or money stock, refers to the total amount of money held by the nonbank public at a point in time in an economy. There are several ways to measure such an amount (called a monetary aggregate), but each includes currency in circulation plus demand deposits (checking-account money).

Money supply data is recorded and published in order to monitor the growth of the money supply. Public- and private-sector analysts have long monitored this growth because of the effects that it is believed to have on real economic activity and on the price level. The money supply is considered an important instrument for controlling inflation by economists who say that growth in money supply will only lead to inflation if money demand is stable.