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How Informative Are Preliminary Announcements of the Money Stock in Canada?


  • Ross D. Milbourne
  • Gregor W. Smith


The authors examine hypotheses about the relation between provisional estimates and final values of M1, M2, and M3, and their growth rates in Canada, using monthly data and multiple revisions. Preliminary values cannot be viewed as final values plus an error (revision) uncorrelated with these, but they are approximately unbiased forecasts of final values. The second difference in short-term interest rates is a leading indicator of revisions in M1 growth rates and revisions exhibit significant seasonality; hence preliminary values are not completely rational forecasts.

Suggested Citation

  • Ross D. Milbourne & Gregor W. Smith, 1989. "How Informative Are Preliminary Announcements of the Money Stock in Canada?," Canadian Journal of Economics, Canadian Economics Association, vol. 22(3), pages 595-606, August.
  • Handle: RePEc:cje:issued:v:22:y:1989:i:3:p:595-606

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    1. repec:cup:apsrev:v:60:y:1966:i:01:p:29-38_12 is not listed on IDEAS
    2. J. W. Friedman, 1968. "Reaction Functions and the Theory of Duopoly," Review of Economic Studies, Oxford University Press, vol. 35(3), pages 257-272.
    3. Paul A. Samuelson, 2011. "The Collected Scientific Papers of Paul Samuelson," MIT Press Books, The MIT Press, edition 1, volume 7, number 0262015749 edited by Janice Murray, January.
    4. R. M. Cyert & M. H. DeGroot, 1970. "Multiperiod Decision Models with Alternating Choice as a Solution to the Duopoly Problem," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 410-429.
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    Cited by:

    1. Faust, Jon & Rogers, John H & Wright, Jonathan H, 2005. "News and Noise in G-7 GDP Announcements," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(3), pages 403-419, June.
    2. Smith, Gregor W., 2009. "Pooling forecasts in linear rational expectations models," Journal of Economic Dynamics and Control, Elsevier, vol. 33(11), pages 1858-1866, November.
    3. Christopher Bajada, 2002. "The Effects of Inflation and the Business Cycle on Revisions of Macroeconomic Data," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(3), pages 276-286.

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