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Money and Inflation in the Euro Area: A Case for Monetary Indicators? / Stefan Gerlach, Lars E.O. Svensson.
- Format:
- Book
- Author/Creator:
- Gerlach, Stefan.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w8025.
- NBER working paper series no. w8025
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Money and Inflation in the Euro Area
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2000.
- Summary:
- This paper studies the relationship between inflation, output, money and interest rates in the euro area, using data spanning 1980 2000. The P* model is shown to have considerable empirical support. Thus, the price gap' or, equivalently, the real money gap' (the gap between current real balances and long-run equilibrium real balances), has substantial predictive power for future inflation. The real money gap contains more information about future inflation than the output gap and the Eurosystem's money-growth indicator (the gap between current M3 growth and a reference value). The results suggest that the Eurosystem's money-growth indicator is an inferior indicator of future inflation.
- Notes:
- Print version record
- December 2000.
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