Money at Low Frequencies

Stefan Gerlach () and Katrin Assenmacher

No 5868, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Many central banks have abandoned monetary targeting because the link between money growth and inflation seemed to disappear in the 1980s. Using spectral regression techniques, we show that for the euro area, Japan, the UK and the US there is a unit relationship between money growth and inflation at low frequencies when the impact of interest rate changes on money demand is accounted for. We estimate Phillips-curve equations in which the low-frequency information from money growth is combined with high-frequency information from the output gap to explain movements in inflation.

Keywords: Quantity theory; Phillips curve; Spectral regression; Frequency domain (search for similar items in EconPapers)
JEL-codes: C22 E3 (search for similar items in EconPapers)
Date: 2006-10
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac, nep-mon and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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