Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264197 
Year of Publication: 
2021
Series/Report no.: 
Bruegel Working Paper No. 11/2021
Publisher: 
Bruegel, Brussels
Abstract: 
Economists and central bankers no longer consider monetary aggregates relevant for inflation forecasts. We explain this neglect by advancing and testing the hypothesis that monetary aggregates are only relevant for inflation in unsettled monetary and inflationary conditions. When inflation is basically stable around the central bank target (1.9 percent), as it has been in most of the last two decades, there is no apparent relationship between monetary aggregates and inflation. This is not surprising: there is not much to be explained about a constant.
Document Type: 
Working Paper
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