Global Financial Data Adds New Money Supply Files

Global Financial Data has added 50 new Money Supply files. With these additions, the GFDatabase now includes data on the Money Supply from over 100 countries. You can find these files by going to GFD’s search engine and choosing Currency in Circulation, M1, M2 or M3 under the Main Indicators. This will provide you with a list of the countries for which GFD has Money Supply data. To obtain the Money Supply for a particular country you can use the mnemonic MS + 3-letter ISO Code + M0 for Currency in Circulation, + M1 for the M1 Money Supply, + M2 for the M2 Money Supply or + M3 for the M3 Money supply. Consequently, the M1 Money Supply for the United States is MSUSAM1 and the Currency in Circulation for the United Kingdom is MSGBRM0, which begins in 1696. You can also divide the money supply values by GDP to calculate any of these four measures as a share of GDP.

Information on the money supply is an important indicator of future inflation. As Milton Friedman said, “Inflation is always and everywhere a monetary phenomenon.” There is a very high correlation between long-term changes in the money supply and long-term changes in Consumer Prices. If you look at the hyperinflations that occurred in Germany, Hungary, Yugoslavia or Zimbabwe in the past, or in Venezuela today, you will see that increases in the money supply preceded the inflation that followed. Since the Great Recession of 2008, however, the Federal Reserve has increased the broader money supply without an increase in the prices of goods. Nevertheless, some people point to the rise in stock prices as a consequence of the large increase in the broader measures of the money supply in the United States and in Europe.

A list of the new files is provided below: