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http://hdl.handle.net/10419/27821
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| Title: | | A case for money in the ECB monetary policy strategy  |
| Authors: | | Löchel, Horst Polleit, Thorsten |
| Issue Date: | | 2005 |
| Series/Report no.: | | Arbeitsberichte der Hochschule für Bankwirtschaft 61 |
| Abstract: | | One major outcome of the review of the ECBs two pillar monetary policy strategy, which was published on 8 May 2003, has been the de facto downgrading of the hitherto prominent role assigned to the stock of money. According to the authors judgement, however, there is a strong theoretical and empirical rationale for the ECB monetary policy to pay close attention to the information content of money in the form of M3. However, the authors argue the ECB should make use of the so-called price gap or real money gap concept rather than the reference value as the latter runs the risk of giving misleading policy recommendations and compromising the indicator quality of the stock of money. Making use of M3 seems all the more rational as currently no better inflation indicator appears to exist in providing inflation forecasts in the euro area. |
| Subjects: | | P-star real money gap excess liquidity ECB |
| JEL: | | E41 E51 E61 |
| Persistent Identifier of the first edition: | | urn:nbn:de:101:1-20080825109 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Frankfurt School - Working Paper Series, Frankfurt School of Finance and Management
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