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Long Run Inflation Indicators - Why the ECB got it Right

Andersson, Fredrik N G LU (2008)
Abstract
This paper studies the issue of whether money contains useful information about future inflation in a panel of nine developed countries. A low frequency estimate of excess money growth is compared to an estimate of the inflation trend following the discussion in Woodford (2007). The empirical analysis shows that money contains more information about future CPI-inflation than an estimate of the inflation trend, and that the output gap has some influence over the medium run movements of inflation, but the effect varies over time. The result is the same for small countries as it is for large countries. Money thus contains information about future headline inflation that the inflation trend does not.
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author
organization
publishing date
type
Working Paper
publication status
unpublished
subject
keywords
monetary policy, inflation, indicators
language
English
LU publication?
yes
id
bc346f0b-ac80-4223-8c6a-5003295decc1 (old id 1852908)
date added to LUP
2011-03-18 10:03:34
date last changed
2016-04-16 11:33:22
@misc{bc346f0b-ac80-4223-8c6a-5003295decc1,
  abstract     = {This paper studies the issue of whether money contains useful information about future inflation in a panel of nine developed countries. A low frequency estimate of excess money growth is compared to an estimate of the inflation trend following the discussion in Woodford (2007). The empirical analysis shows that money contains more information about future CPI-inflation than an estimate of the inflation trend, and that the output gap has some influence over the medium run movements of inflation, but the effect varies over time. The result is the same for small countries as it is for large countries. Money thus contains information about future headline inflation that the inflation trend does not.},
  author       = {Andersson, Fredrik N G},
  keyword      = {monetary policy,inflation,indicators},
  language     = {eng},
  title        = {Long Run Inflation Indicators - Why the ECB got it Right},
  year         = {2008},
}