Does Money Include Information for Prices in the Euro Area? / Enthält Geld Informationen für die Preisentwicklung im Eurowährungsgebiet?

Hans-Eggert Reimers

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2003, vol. 223, issue 5, 581-602

Abstract: Summary In this paper, the P-star framework is mainly used to examine the importance of money for future price movements in the euro area. Constructing the equilibrium price level, simple-sum M3 and different Divisia M3 aggregates are considered. In addition, nominal money changes are investigated in inflation equations. Adapting an in-sample analysis, Divisia aggregates are important for HICP development and to some extent for GDP deflator movement. The out-of-sample forecasting exercise presents evidence that simple-sum M3 includes more information for the HICP, whereas one of the Divisia aggregates helps to predict the future GDP deflator.

Keywords: P-star model; Divisia monetary aggregates; P-Star-Modell; monetäre Divisa-Aggregate (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:223:y:2003:i:5:p:581-602

DOI: 10.1515/jbnst-2003-0506

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