Using An EC-Wide Monetary Aggregate in Stage Two of EMU

Author/Editor:

Peter B. Kenen ; Tamim Bayoumi

Publication Date:

July 1, 1992

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper looks at whether the aggregate ERM money supply has been a useful predictor of short-term changes in inflation and growth, and long-term trends in price levels among the core ERM countries. The evidence suggests that over the period since 1987, when there have been no realignments, the ERM money supply performs at least as well, and arguably better, than the individual national aggregates in predicting nominal aggregates such as inflation and the price level, while neither money supply is a good predictor of real activity.

Series:

Working Paper No. 1992/056

Subject:

English

Publication Date:

July 1, 1992

ISBN/ISSN:

9781451847673/1018-5941

Stock No:

WPIEA0561992

Pages:

20

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