Multilateral Aggregation-Theoretic Monetary Aggregation over Heterogeneous Countries

William Barnett

Chapter 6 in Financial Aggregation and Index Number Theory, 2011, pp 167-206 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractWe derive fundamental theory for measuring monetary service flows aggregated over countries within a multicountry area. We develop three increasingly restrictive approaches: (1) the heterogeneous agents approach, (2) the multilateral representative agent approach, and (3) the unilateral representative agent approach. These results are being used by the European Central Bank in construction of its Divisia monetary aggregates database, with convergence from the most general to the more restrictive approaches expected as economic convergence within the area proceeds. Our theory permits monitoring the effects of policy over a multicountry area, while also monitoring the distribution effects of policy among the countries.

Keywords: Index Number Theory; Aggregation Theory; Money; Financial Assets; Monetary Aggregates (search for similar items in EconPapers)
Date: 2011
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Related works:
Journal Article: Multilateral aggregation-theoretic monetary aggregation over heterogeneous countries (2007)
Working Paper: Multilateral Aggregation-Theoretic Monetary Aggregation over Heterogeneous Countries (2004)
Working Paper: Multilateral Aggregation-Theoretic Monetary Aggregation over Heterogeneous Countries (2004)
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