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Monetarism Beyond M1A

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  • Pablo García,
  • Rodrigo O. Valdés

Abstract

This work analyzes, from an empirical standpoint, the information contained in the M1A aggregate in Chile and compares it with other aggregates. The findings reveal that, at least for now, the M1A aggregate does not seem to have particularly valuable information that would make it a better indicator of inflationary pressures within the monetary policy decision horizon. This is consistent with the practice that central banks followed in the past, when they used quantitative targets for money and focused their analyses on broader aggregates. One possible explanation for the excessive importance given in Chile to the monetary aggregate M1A is the history of financial repression that the country lived until the mid-seventies.

Suggested Citation

  • Pablo García, & Rodrigo O. Valdés, 2004. "Monetarism Beyond M1A," Working Papers Central Bank of Chile 262, Central Bank of Chile.
  • Handle: RePEc:chb:bcchwp:262
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    References listed on IDEAS

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