by Biyan Tang



Divisia Monetary Aggregates have been developed and originated by Professor William A. Barnett (1978[1], 1980[2]) based on economic aggregation theory and index number theory within a microeconomics framework, it aims to provide a much more accurate monetary aggregation index to one of the most important variables, money supply. Since the publication of Barnett’s paper (Barnett 1980), Professor Barnett has improved and refined the Divisia Monetary Index theory over the years, the theory behind Divisia index became completer and mature. Meanwhile, Divisia monetary aggregates have been produced for a very large number of countries throughout the world. Currently, there are seven central Banks known to either construct or use Divisia aggregates internally, for example, Europe Central Band and Bank of Japan; or construct Divisia aggregates and publish them officially, such as the Bank of England, Bank of Israel, National Bank of Poland, International Monetary Fund (IMF), The St. Louis Federal Reserve Bank (which officially publishes a Divisia Monetary Service Index to the public in the United States). A lot of empirical research has been done applying the Divisia Monetary Aggregates theory, currently it has been applied to 48 countries.

On the contrary of the fast growing of Divisia Monetary Aggregates theoretical and empirical development, there is no sufficient academic research on Chinese Divisia Monetary Aggregates given the fact that China being the second largest country in terms of GDP and the first largest in terms of purchasing power adjusted GDP.  It is not until 2016 (Barnett and Tang 2016, see below) that there appears the first publication on Chinese Divisia Monetary since the last publication in 2000. The Monthly Chinese Divisia Monetary Aggregates reports aims to fill in the gap, and provide high quality Chinese economic and financial measurement data to the academic society.

Due to the data availability, the starting date of Chinese Divisia Monetary Aggregates Divisia M0, M1, and M2 is December 1999; for Divisia M3 and Divisia M4, they start from January 2002. The data source and methodology, and literature review about Chinese Divisia Monetary Aggregates can be found in more detail in Barnett and Tang 2016’s Chinese Divisia Monetary Aggregates and GDP Nowcasting paper.

[1] Barnett WA (1978) The user cost of money. Econ Lett 2:145–149

[2] Barnett WA D1980] Economic monetary aggregates: an application of index number and aggregation theory. JEcon 14:11–14 Reprinted in Barnett and Serletis D2000], Chapter 2, pp 11–48


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Cite as follows

“Chinese Divisia Monetary Aggregates and GDP Nowcasting”, William A. Barnett and Biyan Tang, Open Economies Review, vol 27, no 5, November 2016, pp. 825 - 849 .

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The Chinese Divisia Data will be updated quarterly. The last update was in January 2020.

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