Monetary aggregates started to play a very important role in central banks' monetary policies from the second half of the seventies, following the first "oil shock". More than one hundred central banks from both developed and developing countries devised rather sophisticated system during the eighties. The central banks began to use monetary aggregates as their intermediate targets at that time. The number, structure, and role of monetary aggregates gradually developed over the last twenty years. The main factors influencing the development of monetary aggregates were: The development of money markets, the deregulation of both financial markets and banking systems, the implementation of new technologies in the banking industry, the disharmony between the development of monetary aggregates and basic macroeconomics indicators, and the improvement of statistics. During this development the systems of monetary aggregates were simplified and the numbers of monetary aggregates were reduced significantly in most countries. Currently most central banks use one narrow monetary aggregate and one or two broader ones. The aggregate structure has been adapted to developing of the financial markets, and any new financial facilities were included in various countries. Therefore, monetary aggregates of different central banks vary significantly. The examples of five representative countries (Italy, Germany, Austria, USA, and the United Kingdom) seen to show this result. Monetary aggregates of the central banks in Germany and Austria mostly concentrate on money in circulation and traditional sight and demand deposits. Monetary aggregates in other countries also include other items (for example, securities issued by banks and savings banks in the United Kingdom, etc.). Not only the structure but also the role of monetary aggregates varies a great deal from country to country.For example, monetary aggregates are important as an intermediate target in Italy and Germany (specifically the broad monetary aggregate - money supply). Central banks in other countries (Austria, etc.) use these monetary aggregates as indicators. With the advent of a single currency in the European Union, the new situation will be also reflected in the role of monetary aggregates in a common monetary policy. Price stability will be the final goal of European Union in any case. This goal may be reached either through a policy of direct inflation targeting or through implementing money supply as an intermediate target. The final solution is not clear enough at this moment. It seems clear, however, that monetary aggregates will play a significant role in the European Union's common monetary policy, as either an intermediate target or an indicator.
