Adjusted Monetary Aggregates and UK Inflation Targeting
Posted: 29 Feb 2008
This study shows how to construct monetary aggregates using a procedure to adjust the simple-sum, Divisia and empirical monetary aggregates to be consistent with weak separability. The corresponding adjusted monetary aggregates have considerable leading indicator information and provide the most accurate predictions of inflation over the Bank of England's two year forecast horizon.
JEL Classification: C14; C43; E51; E52
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