Monetary aggregates as indicators of economic activity in Canada: empirical evidence
AbstractEmpirical evidence linking monetary aggregates to variables such as inflation and economic growth has weakened over the past two decades. In this study we re-examine these relationships by creating composite monetary aggregates that switch among existing monetary aggregates, using quarterly data over the sample 1971-99. Overall, composite monetary aggregates appear to be useful in explaining or forecasting short-run movements in GDP growth and inflation. Also, the most successful composite monetary aggregates produce switch dates that overlap with the introduction of financial innovations. These subsequently prompted the Bank of Canada to revise or introduce new monetary aggregates.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 34 (2001)
Issue (Month): 1 (February)
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Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
Web page: http://economics.ca/cje/
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Find related papers by JEL classification:
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
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