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Advances in Monetary and
Financial Measurement (AMFM)

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CFS Money Supply for December
(Released January 29, 2024)

CFS Monetary & Financial Data Release (Including Analysis of Components) -  CFS Divisia M4, which is the broadest and most important measure of money, fell by 0.4% in December 2023 on a year-over-year basis, following a decrease of 1.0% in November.   Note that major changes to the Fed’s H.6 Statistical Release have impacted how the CFS Divisia Monetary Aggregates are calculated. See page 2 of the release for more details.   More

Getting It Wrong: How Faulty Monetary Statistics Undermine the Fed, the Financial System, and the Economy, 2011 - CFS Director of Advances in Monetary and Financial Measurement William A. Barnett argues that too little use of the relevant economics, especially from the literature of economic measurement is to blame for the recent financial crisis and that better financial data could have signaled the misperceptions and prevented the erroneous systemic-risk assessments.

Markets and Volatile Monetary Policy: Empirical Lessons from Banking Instability - Ahead of the upcoming FOMC meeting, the stock market is elevated and the economy and inflation are on the descent.  Monetary policy meaningfully contributed to the distress at the Silicon Valley Bank and recent swings in financial markets.  CFS president Lawrence Goodman offers a solution for officials and an opportunity for investors to profit.  More

A Story of Money, Inflation, and the CFS - CFS President Lawrence Goodman shows how the use of CFS Divisia money supply would have helped officials strengthen financial policy and investors safeguard assets or profit. Similarly, the piece offers ideas to develop a more reliable and accountable data-dependent framework for policy design.  More

Inflation has Fed critics pointing to spike in money supply - In his piece at The Washington Post, David J. Lynch asks the question “why does the Fed ignore the money supply”? It covers much ground, references Bill Barnett's work as CFS director of Advances in Monetary and Financial Measurement (AMFM), and quotes Steve Hanke, CFS special counsellor and Johns Hopkins professor.

Post-Pandemic Economic Risks - Professor William A. Barnett - Director of Advances in Monetary and Financial Measurement at CFS - highlights how the post-pandemic period could see a conflict between Treasury's desire to minimize the cost of government debt finance and the Fed's need to moderate inflation.  More

Inflation Fears Offers the Fed a Chance to Modernize with Money - Since 2012, CFS has offered the public alternative monetary measures - pioneered by Professor William A. Barnett. From this work, we now know that measuring activity in the financial system better predicts both inflation as well as financial instability risks.   More

Why CFS Divisia Money Matters, Now! - At the Society for Economic Measurement, Lawrence Goodman illustrates how the world may have been different had CFS Divisia money been on the Fed's dashboard.  More

Two Measures for the Fed and Investors - With inflation in excess of 5% in each of the last 5 months, two measures should influence Fed and investor decisions going forward.  More

Professor William A. Barnett directs a program to deepen state-of-the-art advances in monetary and financial measurement and to make the resulting data available to the public. The modern literature on aggregation-theoretic monetary aggregation began with his seminal 1980 paper in the Journal of Econometrics. This site incorporates his most recent advances and supplies the results in the public interest.

Conventional money-supply measures are not adjusted to account for differences in the degree to which various assets actually serve as money. Divisia measures, named after the early 20th-century French economist, Francois Divisia, make proper adjustments and thereby offer a more accurate picture of what is really happening to the money supply. Professor Barnett has spent many years studying and refining Divisia measures of money supply, first as a staff economist at the Federal Reserve Board and then as a university professor. He derived the formula for applying the Divisia measure to monetary assets, while on the staff of the Federal Reserve Board in Washington, DC. This site offers the fruits of his work in this area along with the work of other experts in monetary aggregation and index number theory.

Since monetary assets began paying interest over a half century ago, Divisia measures have given better forewarning of U.S. recessions than conventional, simple-sum, money-supply measures. Inadequate availability of good quality monetary and financial data has been associated with misinformed decisions in the public and private sector for decades. Professor Barnett’s book, Getting It Wrong: How Faulty Monetary Statistics Undermine the Fed, the Financial System and the Economy, which was published by MIT Press, is associated with this site. The book is built upon a tradition that has become known as “the Barnett critique.” Bill also co-authored the book, Inside the Economist's Mind, with the late Paul Samuelson, America‘s first Nobel Prize Winner in Economics. That book has been translated into seven languages.

Here is a brief description of the contents of the site.

  • Aggregation-Theoretic Monetary Data for the US: This database provides monetary and financial measures, rigorously founded in economic aggregation and index-number theory, and incorporates the most recent advances in economic measurement.
  • CFS Credit Card-Augmented Divisia Aggregates for the US: This database augments the CFS Divisia monetary aggregates by inclusion of the transaction services of credit cards, both in demand side aggregation and in inside-money supply-side aggregation. The inside money Divisia aggregates, including credit card services, banking services, and some shadow banking services, do not include currency or Treasury bills, since those services are not outputs of private sector production.
  • International Advances in Monetary and Financial Measurement: Divisia and Fisher-ideal monetary aggregates exist for a vast number of countries throughout the world; but only a few central banks make those data available to the public. This page provides aggregation-theoretic monetary data, made public by international central banks, along with links to the far greater number of nonpublic, international sources and associated research publications.
  • Publication Opportunities: This section provides information on highly-qualified publishers, recommended for research submissions in this area.
  • Library: This compilation consists of key articles and books surrounding the development of advances in monetary and financial measurement.
  • Society for Economic Measurement: This section summarizes the objectives of the new Society for Economic Measurement, and links to the society's main site, hosted by Carnegie Mellon University.
  • AMFM Charter Fellows: This section lists fellows who have been appointed by CFS as our AMFM program expands in both scope and objectives.