Credit resources and monetary aggregates

In modern economic science, the monetary aggregate is considered as the amount of money, as well as other financial resources, identical to the money supply. It is generally accepted that monetary aggregates have a liquidity close to unity.

Throughout most of the time of using this economic category, it has been assumed that the main monetary aggregates act as the main objects of credit policy.

In economic science, such aggregates of the money supply are considered as:

• Cash (M0);
• Financial assets: cash , credit and call deposits (M1);
• Aggregates of the type M2 - are formed by the addition of M and various types of term deposits;
• Aggregates of the type M3 - are formed by the addition of M and a number of large term deposits (deposit certificates);
• Aggregates of the type L-the widest of the aggregates, which includes general financial assets, without exception.

In today's economy, credit resources are becoming increasingly important in the structure of monetary aggregates. And this is directly determined by the need to expand the functions of credit.

In the questions of the list of functions of credit and their characteristics, economists did not come to a common opinion. Often, the same characteristics of a function refer to different function names or, conversely, different functions are identified.

For example, the replacement function is identified by the signs of money and the credit function of circulation, since it is argued that in both cases credit acts as a category of exchange. Nevertheless, it is necessary to separate these functions, since it is obvious that the issue of credit money (the fact of substitution by money signs) and circulation of credit money is far from identical and affect the monetary aggregates and their types in terms of their composition and structure.

When characterizing the distribution function, the literature emphasizes the productive nature of the redistribution of credit resources. However, the functioning of credit resources does not always have a productive character, that is, a reallocated, but not increased, credit value that can not be included in monetary aggregates. In this regard, in addition to the steam distribution function, the function of stimulating resource saving should be proposed, which is responsible for the productive nature of the movement of credit value, and the function of creating a new credit value as self-increasing.

In the economic literature, there are three main functions of the loan - distribution, control and substitution, as well as a number of other functions that determine the active role of credit as part of money included in monetary aggregates. That is why, on the basis of known functions, a classification of functions that retain their relevance with the addition of a new credit function is formed: the transformation of inactive capital into a functioning one.

It provides:

• Credit to the economy as a whole:
• Creation of a new credit value as a self-increasing value;
• Creation of a loan for circulation (credit and non-loan money);
• Credit servicing of money turnover (real and modern, so-called loan money);
• Replacement of cash money turnover (credit cash and credit non-cash money).

The role of the loan as a result of the implementation of its functions will ensure the acceleration of the circulation of monetary funds, which, in turn, will have a positive effect on monetary aggregates.

The principle of constructing such a model is in the hierarchy determined by the purpose, direction, and details of the functions. The classification of functions is based on the creation of a new credit value as self-increasing, and the end result involves the transformation of inactive capital into a functioning one.