Building new monetary services indices: methodology and source data

This paper is second of two from the Monetary Services Indices (MSI) Project at the Federal Reserve Bank of St. Louis. The first paper, Working Paper 96-007B, surveys the microeconomic theory of the aggregation of monetary assets. This paper describe a new database of monetary services indices (MSI) for the United States. The MSI measure the flow of monetary services received each period by households from their holdings of monetary assets; the levels of the indices are often also referred to as Divisia monetary aggregates. In addition to indices of the flow of monetary services, the database contains dual user cost indices, measures of potential aggregation error in the monetary services indices, and measures of the stock of monetary wealth. An overview of the Project and the concept of monetary aggregation is included here as a preface.