While the reference value plays an important role in monetary analysis, the assessment of the first pillar goes beyond the evaluation of deviations of M3 growth from the reference value. It encompasses a variety of approaches which assign a central role to money, as well as a detailed analysis of the components and counterparts of M3.
Most of the conversation about monetary policy in this country concerns what the FOMC is doing – how many assets is the Committee buying this month? How low is the Committee keeping interest rates? These are, no doubt, important questions, especially for those in the financial sector.