True Money Supply
The True Money Supply (TMS) is an Austrian Economics School metric used to measure money immediately available for transaction. It consists of cash, demand deposits (check accounts), savings and government deposits at the Federal Reserve
Importance of TMS
- Declining TMS is correlated with recessions (leading indicator)
What is TMS
- Developed by the Austrian School of economics
- Developed in the 1970s and 1980s
- Measures money that is immediately available for transaction. Include:
- cash
- demand deposits (check accounts)
- savings
- government deposits at the Federal Reserve
Calculating TMS