A time series obtained from the original series by averaging the figures for a number of consecutive periods. For example, suppose that x_t is the original series for years t = 1, 2,…, N. A moving average y_t can be calculated by averaging x_t for a number of periods centred on t, say t - 2, t - 1, t, t + 1 and t + 2. When the original series fluctuates either cyclically or randomly, y_t fluctuates less, which makes it easier to follow what has happened. Moving averages do have some disadvantages, however. First, it is not possible to construct a moving average for the most recent periods: in the example above, for the two most recent periods for which x_t is available. Also, suppose that nothing much has happened to x_t except at time t^* suppose x_t ^* = 1 and all other x_t are approximately zero. y_t will be approximately zero except at times t^* - 2 to t^* + 2; for these y_t is approximately 0.2. Thus y_t rises by approximately 0.2 from t^* - 3 to t^* - 2, and falls by approximately 0.2 from t^* + 2 to t^* + 3, though nothing much actually changed at these times, while from t^* - 1 to t^* and from t^* to t^* + 1, y_t hardly moves when the only major change in x_t was taking place. In this case use of a moving average actually obscures what was happening.

• misaligned exchange rate
• misery index
• mis-match
• missing markets
• mixed economy
• mixed strategy
• mix of policies
• MLR
• MMC
• mobility, capital
• mobility of labour
• mode
• model
• model-consistent expectations
• Modigliani-Miller theorem
• modulus
• monetarism
• monetary accommodation
• monetary base
• monetary control
• monetary overhang
• monetary policy
• Monetary Policy Committee
• monetary system
• monetary union