True Money Supply
True Money Supply (TMS), what Austrian economists call “money in the broader sense,” is based on the definition of money as originally formulated by Ludwig von Mises in his The Theory of Money and Credit.
Algebraically, TMS = Standard Money (held by the public) + Money Substitutes
TMS was further developed / brought current with varying degrees of differences and interpretations by economists Murray Rothbard, Joseph Salerno and Frank Shostak, differences one author has attempted to resolve in the essay Money Supply Metrics, the Austrian Take [1]
The TMS consists of the following:
- Currency Component of M1
- Total Checkable Deposits
- Savings Deposits
- U.S. Government Demand Deposits and Note Balances
- Demand Deposits Due to Foreign Commercial Banks
- Demand Deposits Due to Foreign Official Institutions.
See also: Money supply
References
Links
- Series: True Money Supply
- The "True" Money Supply: A Measure of the Supply of the Medium of Exchange in the U.S. Economy (pdf) by Joseph T. Salerno, 1987