Wednesday, April 22, 2015

An interesting detail

I quoted from some of the notes on FRED series for yesterday's post. I didn't need this part from the Small Time Deposits - Total series yesterday, but it is too significant to pass up:

The small-denomination time deposit component of M2 excludes individual retirement account (IRA) and Keogh balances at depository institutions because heavy penalties for pre-retirement withdrawals make them too illiquid to be included in the monetary aggregates.

They are "too illiquid to be included" in the M2 measure of money.

No comments: