Monetary Aggregates as Indicators of Economic Activity in Canada: Empirical Evidence
Pierre L. Siklos
Wilfrid Laurier University - School of Business & Economics
Andrew G. Barton
Deloitte Touche Tohmatsu - Toronto Office
Canadian Journal of Economics
Empirical evidence concerning the link between monetary aggregates and inflation or GDP growth has been underemphasized in recent years. This paper re-examines existing simple sum and creates composite monetary aggregates a la Feldstein and Stock (1996) in the Canadian context over the 1971-99 period. We find that composite monetary aggregates appear to be useful determinants of inflation and GDP growth. In addition, the best composite aggregates produce switch dates that overlap with known financial innovations. These often led the Bank of Canada to revise existing simple sum monetary aggregates or create new ones.
Note: This is a description of the article and not the actual abstract.
JEL Classification: E51, E52, C52, C53Accepted Paper Series
Date posted: July 18, 2000
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