Does money lead inflation in the euro area?

Sergio Nicoletti Altimari

No 63, Working Paper Series from European Central Bank

Abstract: This paper investigates the properties of monetary and credit aggregates as indicators for future price developments in the euro area. The forecasting performance of models including indicators based on money and credit is assessed in a simulated out-of-sample forecasting exercise for forecast horizons varying from one quarter to three years ahead. The performance of these models is compared with that of models which include indicators based on financial markets, real activity, the labour market and various cost and price measures. The results support the idea that monetary and credit aggregates provide significant and independent information for future price developments in the euro area, especially at medium term horizons JEL Classification: E31, E40, C32

Keywords: euro area; inflation; Leading indicators; money; P-Star (search for similar items in EconPapers)
Date: 2001-05
Note: 3625407
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (125)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:200163

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