Using An EC-Wide Monetary Aggregate in Stage Two of EMU
July 1, 1992
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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.
Subject: Exchange rates, Foreign exchange, Industrial production, Inflation, Monetary aggregates, Monetary base, Money, Prices, Production
Keywords: aggregate ERM series, core ERM country, ERM aggregate, ERM country, ERM monetary aggregate, ERM money supply, ERM parity, Exchange rates, Global, Industrial production, Inflation, monetary aggregate, Monetary aggregates, Monetary base, monetary policy, money supply, money supply granger, WP
Pages:
20
Volume:
1992
DOI:
Issue:
056
Series:
Working Paper No. 1992/056
Stock No:
WPIEA0561992
ISBN:
9781451847673
ISSN:
1018-5941
