Rapid Growth Of Monetary Aggregates And Inflation: The International Evidence

Jose De Gregorio

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: This paper presents empirical evidence for low inflation countries in which M1 has grown persistently for at least one year at rates much higher than the inflation rate. In none of these episodes has there been a similar increase in inflation, as a straightforward application of the simplest version of the quantity theory of money would suggest. This evidence confirms the idea that even in a world of long-run neutrality of money, the use of monetary aggregates to conduct monetary policy could be highly misleading.

Date: 2004-04
New Economics Papers: this item is included in nep-cba, nep-lam and nep-mac
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:256

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