1. Chapter 2
Money

2. CONTENS 2.1 Characteristics of Money
2.2 Evolution of the Payments System
2.3 The Future of Money
2.4 Measuring Money

3. 2.1 Characteristics of Money
Money is an asset that is generally accepted as payment for goods and services or repayment of debt.

4. Characteristics of Money
1. A means of payment.
2. A unit of Account
3. A Store of Value

5. 2.2 The Payments System 1. Types of Money
Commodity Money – Things that have intrinsic value
Fiat Money – Value comes from government decree (or fiat)

6. The Payments System 2. Checks
Instructions to the bank to take funds from your account and transfer those funds to the person or firm whose name is written in the “Pay to the Order of” line.

7. The Path of a Paper Check

8. The Payments System 3.Other Forms of Payments Credit Cards Debit Cards
Electronic Funds transfers
Stored Value Cards

9. 2.3 Future of Money
Electronic money?
Paperless money?

10. Liquidity
Liquidity
a measure of the ease an asset can be turned into a means of payment (Money).

11. 2.4 Measuring Money
Different Definitions of money based upon degree of liquidity.
Federal Reserve System defines monetary aggregates.

12. 1. Monetary Aggregates
Link to Current Data

13. Measuring Money
Different Definitions of money based upon degree of liquidity.
Federal Reserve System defines monetary aggregates.

14. Measuring Money 流动性是各国划分货币供给层次的主要依据. M1 ，M2，M3
We compute several measures of money called the monetary aggregates: M1, M2, M3 and so forth.
流动性是各国划分货币供给层次的主要依据.

15. Measuring Money In China： M0＝流通现金 狭义M１＝ M0+可开支票的存款
In Usa： M1,M2,M3,L

16. M1 is the narrowest definition of money，and reflect the direct purchasing power.
M2 is the most commonly quoted monetary aggregate，and reflect the potential purchasing power.
广义货币M2，反映潜在购买能力

17. 年中国各层次货币供给统计 单位:亿元

18. Monetary Aggregates
Link to Current Data

19. Growth Rates in Monetary Aggregates

20. Money and Inflation
M2 Growth Rate and CPI Inflation Rate 2 years later.

21. Measures of Inflation Fixed-weight Index - CPI
Deflator – GDP or Personal Consumption Expenditure Deflator
Chain-weight index – Half way between fixed-weight and a deflator.

22. Chapter 2
End of Chapter