Divisia money

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Divisia money is an index of broad money money supply growth usually published as year over year percentage change.

Unlike other measures, it weights the growth of components by their ease of use in transactions - money's role as a medium of exchange. The calculation depends on the detailed definition and methodology followed by the country in which it is calculated.

The Bank of England, for example, calculates Divisia money as a weighted average of the growth rates of the UK M4 component assets and publishes it regularly as part of Bankstats (Monetary & Financial Statistics).

Divisia money measures are intended to be more suitable for use in near-term economic forecasting than the simple monetary aggregates.

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