Monetary aggregates

• Long-Run Demand for M1

  Staff Working Paper 1995-11 Scott Hendry

  The goal of this paper is to investigate and estimate long-run relationships among M1, prices, output and interest rates, with a view to determining if there is a stable relationship that can be interpreted as long-run money demand. The paper uses a maximum-likelihood multiple-equation cointegration technique, developed by Johansen, to fit a system of equations […]

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Monetary aggregates

• The Canadian Experience with Weighted Monetary Aggregates

  Staff Working Paper 1995-10 David Longworth, Joseph Atta-Mensah

  This paper compares the empirical performance of Canadian weighted monetary aggregates (in particular, Fisher ideal aggregates) with the current summation aggregates, for their information content and forecasting performance in terms of prices, real output and nominal spending for the period 1971Q1 to 1989Q3. The properties of money-demand equations for these aggregates, particularly their temporal stability, […]

  Content Type(s): Staff research, Staff working papers Topic(s): Monetary aggregates
• May 9, 1995

  Interpreting recent changes in monetary aggregates

  Bank of Canada Review - Spring 1995 Kevin Clinton

  In 1994, broad monetary aggregates such as M2+ grew at an unusually slow rate, indicating a continuation of low inflation. Narrow money, M1, ballooned early in the year, partly for technical reasons. However, its overall deceleration for the year as a whole would be consistent with lower output growth in the first half of 1995 than was seen the year before. During the first half of 1994, there was a continued shift by investors from deposits into equity, bond and mortgage mutual funds. In the second half of the year, following a rise in interest rates and a fall in the yields posted by mutual funds, there was a movement back into M2+. In this annual review of the monetary aggregates, the author discusses the reasons for these shifts and their implications for M2+.

  Content Type(s): Publications, Bank of Canada Review articles Topic(s): Monetary aggregates