The Monetary Base
M = Bm
m = M/B
M can be M1, M2, M3, etc.

The Monetary Base
Liabilities of the monetary authorities …
the Fed and the Treasury …
could be used as reserves.
Equals bank reserves plus currency held by public
B = R + CP

The Monetary Base
R can be divided into reserves deposited with district Feds …
and currency and coin held by banks.
R = Fb + Cb
Sub into B = R + CP …
B = Fb + Cb + CP
The Fed’s Balance Sheet
Assets
U.S. Gov Securities (P)
Loans (discount) (A)
Coin (Fca)
Cash items in process of collection (CIPC)
Gold certif & SDR certif accounts (G)
Items denominated in foreign currencies & other assets (OA)
Liabilities+Capital
Federal Reserve Notes (FRN)
Deposits
Banks (Fb)
U.S. Treasury (Ft)
Foreign & other (Ff)
Deferred availability cash items (DACI)
Other liabilities + Capital (OLC)

Float
Float = Fl = CIPC - DACI