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ERM Money Supplies and the Transition to EMU, Paul Masson, Marcel Cassard, Timothy Lane

Abstract
Stage 2 of monetary union in the Europe is to involve greater monetary cooperation; the paper examines the case for using the M3 money supply aggregated across “core ERM” countries- -those with low inflation and absence of realignments- -as a vehicle for that cooperation. First, the existence of a satisfactory long-run money demand relationship and short-run dynamic equation is verified. The resulting demand equations have at least as satisfactory econometric properties as those for France and Germany separately. Second, the predictive power of the core-ERM aggregate relative to French and German inflation is examined; it is shown that the aggregate helps to predict German inflation, over and above the predictive power of German M3. Thus, core-ERM M3 has value as an indicator for the anchor country in hitting its own domestic objective, quite separate from any concern about economic developments in neighboring countries
Language
eng
Literary Form
non fiction
Note
Bibliographic Level Mode of Issuance: Monograph
Physical Description
1 online resource (42 pages)
Form Of Item
online
Isbn
9781462369287

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