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Assessing the origins and legacy of monetary aggregates

Author

Listed:
  • Paweł Kowalewski

    (Narodowy Bank Polski, Market Operations Department)

Abstract

Monetary aggregates were an extremely popular strategy pursued by the majority of central banks between the turn of 1970s and 1980s. The gathering pace of deregulation in the international financial markets in the 1980s started, however, to affect demand for money and subsequently it made almost impossible for the majority of central banks to rely on this particular strategy any longer. Still, there was one central bank which, with the help of its pragmatism and a rather versatile approach towards monetary aggregates, managed to prove that these aggregates were useful in preserving the monetary equilibrium. December 2024 marks the 50th anniversary of the German DBB (Deutsche Bundesbank) decision to stick to this monetary tool. This anniversary poses a good opportunity to present their origins as well as their legacy. This assessment will be done with a historical and theoretical presentation along with a detailed description of the DBB’s case.

Suggested Citation

  • Paweł Kowalewski, 2025. "Assessing the origins and legacy of monetary aggregates," Bank i Kredyt, Narodowy Bank Polski, vol. 56(4), pages 381-412.
    • Handle: RePEc:nbp:nbpbik:v:56:y:2025:i:4:p:381-412
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    References listed on IDEAS

    as
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    Keywords

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    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
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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