Construction of an estimated domestic monetary base using new estimates of foreign holdings of U.S. currency
AbstractThis paper presents a new method to estimate the amount of U.S. currency held abroad. The method exploits the fact the Federal Reserve System is the major processor of currency for depository institutions. The method exploits differentials across denominations in the ratios of shipments to receipts of currency at Federal Reserve cash offices in New York City and nationwide. The method permits us to construct a new monthly time series on the domestic monetary base, M1 and M2. The method has several advantages over previous methods, including an earlier starting date (1965) and the ability to be updated easily each month from Federal Reserve currency processing data. Relative to previous studies, our estimates suggest larger currency exports during the 1970s and early 1980s, and a sharp slowing of exports since 1995. ; This paper has been replaced with working paper 2000-002, "The Domestic Adjusted Monetary Base".
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Bibliographic InfoPaper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 1997-019.
Date of creation: 1997
Date of revision:
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- Richard D. Porter & Ruth A. Judson, 1996. "The location of U.S. currency: how much is abroad?," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Oct, pages 883-903.
- Richard G. Anderson & Robert H. Rasche, 1996. "Measuring the adjusted monetary base in an era of financial change," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 3-37.
- Feige, Edgar L., 2012. "The myth of the “cashless society”: How much of America’s currency is overseas?," MPRA Paper 42169, University Library of Munich, Germany.
- Feige, Edgar L., 2011. "New estimates of U.S. currency abroad, the domestic money supply and the unreported Economy," MPRA Paper 34778, University Library of Munich, Germany.
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