Monetary reform: new aggregates as a foundation for the digital age

The limited space of the 'traditional' aggregates M1, M2 and M3, which make up the money supply, has now been replaced by an unlimited space, defined by new analytical tools, M5 and M6, based on the infinite amount of data and cross-referencing made possible by digital technology. 
This is the new paradigm developed by Jean-François Serval and Jean-Pascal Tranié in an article published in the April 2023 issue of Revue Banque (No. 879), which takes up the thesis developed in their latest book, "Innovations financières et Réforme monétaire ou comment sortir du piège de la dette" (Lextenso). 
The authors explain that this new framework for analysing the monetary sphere using data is an essential prerequisite for implementing a monetary reform that redefines a revamped regulatory system. The latter will pave the way for a proactive policy of controlling public deficits and reducing debt. The cross-referencing of data, they emphasise, should not only provide a precise map of exchanges, but also improve the rules to ensure the fluidity and security of monetary circulation, the regulation of which is the responsibility of the State.

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