Money at Low Frequencies

14 Pages Posted: 20 Dec 2006

See all articles by Katrin Assenmacher

Katrin Assenmacher

Swiss National Bank

Stefan Gerlach

Central Bank of Ireland; Centre for Economic Policy Research (CEPR)

Date Written: October 2006

Abstract

Many central banks have abandoned monetary targeting because the link between money growth and inflation seemed to disappear in the 1980s. Using spectral regression techniques, we show that for the euro area, Japan, the UK and the US there is a unit relationship between money growth and inflation at low frequencies when the impact of interest rate changes on money demand is accounted for. We estimate Phillips-curve equations in which the low-frequency information from money growth is combined with high-frequency information from the output gap to explain movements in inflation.

Keywords: Quantity theory, Phillips curve, spectral regression, frequency domain

JEL Classification: C22, E3

Suggested Citation

Assenmacher, Katrin and Gerlach, Stefan, Money at Low Frequencies (October 2006). CEPR Discussion Paper No. 5868, Available at SSRN: https://ssrn.com/abstract=952804

Katrin Assenmacher

Swiss National Bank ( email )

Borsenstrasse 15
CH-8022 Zurich
Switzerland

Stefan Gerlach (Contact Author)

Central Bank of Ireland ( email )

P.O. Box 559
Dame Street
Dublin, 2
Ireland

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
23
Abstract Views
658
PlumX Metrics