Monetary aggregates refer to the amount of money in circulation in the economy (money supply).
In the euro area, the European Central Bank (ECB) defines three monetary aggregates. The narrow monetary aggregate, known as M1, is the sum of banknotes and coins in circulation and overnight deposits. The intermediate monetary aggregate, or M2, is the sum of M1, deposits with an agreed maturity of up to two years and deposits redeemable at notice of up to three months. Lastly, the broad monetary aggregate, or M3, is the sum of M2, repurchase agreements, money market fund shares/units and debt securities with a maturity of up to two years issued by monetary financial institutions.
Another commonly used monetary aggregate is M0, also called the monetary base, which is the sum of banknotes and coins in circulation and bank reserves. This is typically the smallest aggregate (i.e. the narrowest) and also that over which central banks have more control, which is why historically they have played an important part in conducting monetary policy.