Advanced Search
MyIDEAS: Login to save this paper or follow this series

M0: Causes and Consequences

Contents:

Author Info

  • Francis Breedon
  • Paul Fisher

Abstract

This paper analyses four aspects of the determination and effects of M0 using annual, quarterly and monthly data. First it analyses the issue of the correct scale variable for determining M0. A combination of survey evidence and statistical tests indicate that retail sales is the most appropriate scale variable to use in looking at M0. Second, the paper looks at the best way to explain the trend in M0 velocity. It confirms earlier results showing that a cumulative interest rate term gives an adequate representation of the trend and is better than a linear time trend for this purpose. Third, the paper looks at the short-run interest elasticity of demand for M0. It finds that this elasticity is highly variable across models and suggests that the analysis of M0 is problematic following substantial changes in interest rates. Lastly, and probably most controvertially it looks at the leading indicators of properties in M0 for inflation. It finds that these are particularly robust and cannot be matched simply by the product of the explanatory terms in the M0 equation. Although this result is implicit in previous work done in the Bank (eg 'VAR models of inflation' Bank of England Quarterly Bulletin, May 1993) this paper makes an explicit empirical link between M0 and inflation.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/1993/wp20.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Bank of England in its series Bank of England working papers with number 20.

as in new window
Length:
Date of creation: Dec 1993
Date of revision:
Handle: RePEc:boe:boeewp:20

Contact details of provider:
Postal: Publications Group Bank of England Threadneedle Street London EC2R 8AH
Phone: +44 (0)171 601 4030
Fax: +44 (0)171 601 5196
Email:
Web page: http://www.bankofengland.co.uk/
More information through EDIRC

Related research

Keywords:

Other versions of this item:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Mohammad Hasan, 2005. "The information content of M0 in the United Kingdom," Applied Economics Letters, Taylor & Francis Journals, vol. 12(11), pages 711-717.
  2. hasan bakhshi & Andrew Haldane & Neal Hatch, 1999. "Some Costs and Benefits of Price Stability in the United Kingdom," NBER Chapters, in: The Costs and Benefits of Price Stability, pages 133-198 National Bureau of Economic Research, Inc.
  3. Chadha, Jagjit S & Haldane, Andrew G & Janssen, Norbert G J, 1998. "Shoe-Leather Costs Reconsidered," Economic Journal, Royal Economic Society, vol. 108(447), pages 363-82, March.
  4. Garratt, A. & Lee, K. & Pesaran, M. H. & Shin, Y., 1998. "A Long-run Structural Macro-econometric Model of the UK," Cambridge Working Papers in Economics 9812, Faculty of Economics, University of Cambridge.
  5. Ramon Moreno & Reuven Glick, 2001. "Is money still useful for policy in East Asia?," Pacific Basin Working Paper Series 2001-12, Federal Reserve Bank of San Francisco.
  6. Scott Hendry, 1995. "Long-Run Demand for M1," Macroeconomics 9511001, EconWPA.
  7. Norbert Janssen, 1998. "The demand for M0 in the United Kingdom reconsidered: some specification issues," Bank of England working papers 83, Bank of England.
  8. Fischer, Björn & Köhler, Petra & Seitz, Franz, 2004. "The demand for euro area currencies: past, present and future," Working Paper Series 0330, European Central Bank.
  9. Bonin, Holger & Zimmermann, Klaus F., 2000. "The Post-Unification German Labor Market," IZA Discussion Papers 185, Institute for the Study of Labor (IZA).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:boe:boeewp:20. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Publications Team).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.