Forecasting Inflation (and the Business Cycle?) with Monetary Aggregates

João Valle e Azevedo
Authors registered in the RePEc Author Service: Ana Pereira

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: We show how monetary aggregates can be usefully incorporated in forecasts of inflation. This requires fully disregarding the high frequency fluctuations blurring the money/inflation relation, i.e., the projection of inflation onto monetary aggregates must be restricted to the low frequencies. Using the same tools, we show that money growth has (little) predictive power over output at business cycle frequencies.

JEL-codes: C51 E31 E32 E52 E58 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-cba, nep-for, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ptu:wpaper:w201024

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