M1, M2 and M3 measure the amount of money. Learn what they include, why you should not add them together and what they say about your money, without an economics background.
The labels M1, M2 and M3 become easier to understand with diagrams and simple examples. This guide explains what these measures include, then uses the money pie to show what your amount represents within the total.
Banknotes and coins in circulation, plus everything sitting in current accounts. This is what you can spend this second, with nothing to unlock first.
All of M1, plus deposits maturing within two years and savings redeemable at up to three months' notice. Money that is not quite in your pocket, but close.
All of M2, plus repurchase agreements, money market fund shares and debt securities under two years. The broadest measure, and the one the ECB watches most closely.
Money supply is the amount of money counted at a date: notes, coins and bank deposits, depending on the measure selected. Imagine a pie: the whole pie represents that money total, and your amount is a slice of it. GDP measures something different: value produced over a period.
In the euro area, M1 covers cash and deposits available immediately. M2 includes M1 plus some short-term savings deposits. M3 includes M2 plus certain money-market holdings. With €100 in M1, €150 in M2 and €180 in M3, the broadest amount is €180, not €430: the larger measures already include the same euros.
A commercial bank generally creates a deposit when it grants a loan. Repayment of principal reduces that bank money. Central-bank operations also influence the system. Money supply is therefore not simply the quantity of printed banknotes.
A 20% increase in total money does not prove that your groceries rose 20%. Prices also depend on production, costs, demand and how money circulates. The site presents two separate comparisons: a share of money and a basket of prices.
Two measures named M2 do not necessarily cover the same deposits. US M1 was expanded in May 2020: part of the chart’s jump comes from reclassification. China expanded M1 in January 2025; the site’s series starts in 2024, which the central bank restated using the new definition. A definition change is not a money increase to interpret on its own.