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Money as an Indicator in the Euro Zone

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Author Info

  • Jan Gottschalk
  • Felipe Martinez Rico
  • Willem Van Zandweghe

Abstract

This paper attempts to evaluate the information content of money for the forecast of inflation, output, investment and consumption in the euro zone. It considers M1 and M3; a number of modifications to these aggregates is also proposed to enhance their forecast performance. The evaluation employs Granger-causality tests, stability tests and historical out-of-sample forecasts. On balance the information content of money appears to be rather limited. An improvement of the forecast is confined to the real variables and to the second half of the nineties. For the first half of the nineties the forecast performance of money is generally poor.

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File URL: https://www.ifw-members.ifw-kiel.de/publications/money-as-an-indicator-in-the-euro-zone/kap984.pdf
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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 984.

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Length: 35 pages
Date of creation: May 2000
Date of revision:
Handle: RePEc:kie:kieliw:984

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Related research

Keywords: Euro-Zone; Geldmengen; Prognosen;

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References

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Citations

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Cited by:
  1. Nicoletti-Altimari, Sergio, 2001. "Does money lead inflation in the euro area?," Working Paper Series, European Central Bank 0063, European Central Bank.
  2. Klaus Masuch & Sergio Nicoletti-Altimari & Massimo Rostagno & Huw Pill, 2003. "The role of money in monetary policymaking," BIS Papers chapters, Bank for International Settlements, in: Bank for International Settlements (ed.), Monetary policy in a changing environment, volume 19, pages 158-191 Bank for International Settlements.
  3. Jürgen von Hagen, 2004. "Hat die Geldmenge ausgedient?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, Verein für Socialpolitik, vol. 5(4), pages 423-453, November.
  4. Jan Gottschalk & Stéphanie Stolz, 2001. "The Link of the Monetary Indicator to Future Inflation in the Euro Area � A Simulation Experiment," Kiel Working Papers, Kiel Institute for the World Economy 1057, Kiel Institute for the World Economy.

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