Measuring the Economic Stock of Money

Kelly, Logan (2007): Measuring the Economic Stock of Money.

Abstract

Aggregation theoretic measures of the capital stock of money have in the past been criticized for their dependence on future expectations. I attempt to answer some of those objections by using several forecasting methods to generate expectations needed for calculating the economic stock of money. I show that targeted factor model forecasting improves the accuracy of monetary capital stock measurements slightly. However, I also find, as has previous research, that monetary capital stock calculations are robust to assumptions about future expectation. I believe these findings tend to support the conclusion that concerns about the dependency of theoretical monetary stock aggregates on forecasted future expectations have been overstated.

• Item Type: MPRA Paper
• Institution: Bryant University
• Language: English
• Keywords: Monetary Aggregation; Money Stoc; ; Economic Stock of Money; Targeted Factor Models
• Subjects: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E49 - Other

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