In 1992 the EU monetary authorities adopted a 'harmonized' broad money aggregate. The EMI was subsequently established to promote monetary policy coordination. This paper considers how broad money aggregates might be used to guide EU monetary policy and whether a 'Euro-Divisia' monetary index might provide a better guide than a 'Euro-simple-sum' aggregate. Our findings are based on data from the UK, France and Germany. They indicate that 'Euromoney' Granger-causes 'Euro-prices' and that the EuroDivisia monetary index is a better leading indicator of 'Euroinflation' than the Euro-simple-sum monetary aggregate.
|Number of pages||12|
|Publication status||Published - 1 Jan 1997|
ASJC Scopus subject areas
- Economics and Econometrics