European integration and the demand for broad money

Carlo Monticelli and Marc-Olivier Strauss-Kahn

No 18, BIS Working Papers from Bank for International Settlements

Abstract: Co-integration analysis and error-correction modelling show that a stable and predictable aggregate demand for broad money holds for the group of countries participating in the Exchange Rate Mechanism (ERM) of the European Monetary System. This result seems robust to different econometric techniques, samples and methods of conversion of national variables into ecus. Furthermore, ERM-wide equations compare favourably with national equations and with the previous estimates of area-wide equations for narrow money. These findings suggest that an area-wide broad monetary aggregate can play a useful role in the co-ordination of monetary policy at the European level.

Pages: 38 pages
Date: 1992-04
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Citations: View citations in EconPapers (11)

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Related works:
Journal Article: European Integration and the Demand for Broad Money (1993)
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