The current stock of money: an aggregation theoretic measure of narrowly defined money

While the usual definition of narrowly defined money is in terms of grouping of assets to be included in the aggregate, the Current Stock of Money (CSM) focuses on the function of those assets. By isolating the portion of each monetary asset that functions as currency, the CSM measures the amount of currency needed to provide an equal level of monetary service to that of the current monetary portfolio. This makes the CSM suitable for use in any model that contains currency, that is, narrowly defined money. Thus, the main contributions of this research are to derive the CSM and to show that the Currency Equivalent (CE) index is an unbiased measure of the CSM.