M2 refers to cash circulating outside the banking system plus corporate deposits, household savings deposits and other deposits. It includes all possible forms of purchasing power, which usually reflect changes in aggregate social demand and future inflationary pressure.
In recent years, many countries have taken M2 as the target of money supply regulation.
M2 growth means that investment and the middle market are in a relatively buoyant state.
M2 refers to a form or measure of broad money, usually expressed as M2, which is calculated by trading money and time deposits and savings deposits.
M2 is the sum of cash circulating outside the banking system, demand deposits in enterprises and institutions, time deposits in enterprises and institutions, and household savings deposits.
1, different international division is different M1 is a narrow sense of money, cash in circulation + checking deposits (and transfer credit card deposits);
M2 is broad money, M1+ savings deposits (including demand and time deposits).
2. M1 reflects the real purchasing power in the economy and is the leading indicator of economic cycle fluctuations;
M2 not only reflects the actual purchasing power, but also reflects the potential purchasing power. It is the change of the aggregate social demand and the future inflation pressure. Generally speaking, the money supply mainly refers to M2.
3. The liquidity of M1 is stronger than M2 but slower than M0.