How much actual money is there in the world?

Global Money Supply: Quantifying Liquid Assets

The financial landscape is constantly evolving, and understanding the amount of money in circulation is crucial for economic analysis and decision-making. Global liquid assets, as measured by the M2 money supply, provide a comprehensive view of the monetary landscape.

M2 Money Supply: A Measure of Liquidity

The M2 money supply is a widely accepted measure of liquidity, encompassing physical currency in circulation and various forms of deposits, including checking accounts and savings accounts. It represents the money that is readily available for spending or investment.

Global Liquid Assets in Perspective

As of December 2022, global liquid assets amounted to approximately $21.2 trillion. This massive sum represents the combined value of physical currency and demand deposits held by individuals, businesses, and financial institutions worldwide.

Distribution of Liquid Assets

The distribution of liquid assets is not uniform across the globe. Developed economies typically have higher levels of liquid assets per capita compared to developing economies. The United States, Japan, and the Eurozone are among the largest holders of global liquid assets.

Significance for Economic Analysis

The M2 money supply serves as a key indicator for economic growth, inflation, and monetary policy decisions. Central banks closely monitor changes in the money supply to assess economic conditions and make appropriate adjustments to interest rates and other monetary tools.

Fluctuations and Implications

The global money supply is not static and can fluctuate due to various factors, such as changes in economic activity, government policies, and financial market movements. Rapid increases in the money supply can contribute to inflation, while sluggish growth can lead to economic stagnation.

Understanding the Global Money Supply

Comprehending the global money supply, as measured by the M2 money supply, provides valuable insights into the monetary health of the world economy. It allows policymakers and economists to make informed decisions that foster economic stability and growth. The $21.2 trillion in global liquid assets represents a significant monetary foundation upon which global economic activities are conducted.