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The Currency Equivalent Index and the Current Stock of Money

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  • Kelly, Logan J

Abstract

The currency equivalent index provides an elegant method for measuring the stock of money, but it rests upon assumptions that do not match an important characteristic of the data. Thus, it is unclear what, if anything, the CE measures. This paper attempts to answer this question by deriving the current stock of money (CSM), which is defined to be the discounted present value of the monetary service flows provided by only the current portfolio of monetary assets, and then analyzing the assumptions under which the current stock of money can be measured by the currency equivalent index.

Suggested Citation

  • Kelly, Logan J, 2008. "The Currency Equivalent Index and the Current Stock of Money," MPRA Paper 7176, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:7176
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    File URL: https://mpra.ub.uni-muenchen.de/7270/3/MPRA_paper_7270.pdf
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    References listed on IDEAS

    as
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    7. Nelson, Charles R. & Plosser, Charles I., 1982. "Trends and random walks in macroeconmic time series : Some evidence and implications," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 139-162.
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    Cited by:

    1. Kelly, Logan J, 2008. "The Stock of Money and Why You Should Care," MPRA Paper 11455, University Library of Munich, Germany.

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    More about this item

    Keywords

    Currency Equilivant Index; Monetary Aggregation; Money Stock;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • E49 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Other

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