Measuring the Economic Stock of Money
AbstractAggregation theoretic measures of the capital stock of money have in the past been criticized for their dependence on future expectations. I attempt to answer some of those objections by using several forecasting methods to generate expectations needed for calculating the economic stock of money. I show that targeted factor model forecasting improves the accuracy of monetary capital stock measurements slightly. However, I also find, as has previous research, that monetary capital stock calculations are robust to assumptions about future expectation. I believe these findings tend to support the conclusion that concerns about the dependency of theoretical monetary stock aggregates on forecasted future expectations have been overstated.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 4914.
Date of creation: 13 Sep 2007
Date of revision:
Monetary Aggregation; Money Stoc; ; Economic Stock of Money; Targeted Factor Models;
Find related papers by JEL classification:
- E49 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-24 (All new papers)
- NEP-CBA-2007-09-24 (Central Banking)
- NEP-MAC-2007-09-24 (Macroeconomics)
- NEP-MON-2007-09-24 (Monetary Economics)
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