Jackson Loi

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Regime Shifts in the Indicator Properties of Narrow Money in Canada

Staff Working Paper 2006-6 Tracy Chan, Ramdane Djoudad, Jackson Loi
Financial innovations and the removal of the reserve requirements in the early 1990s have made the distinction between demand and notice deposits arbitrary.
Content Type(s): Staff Research, Staff Working Papers Topic(s): Monetary aggregates JEL Code(s): E, E4, E40, E42, E5, E50
June 25, 2005

Changes in the Indicator Properties of Narrow Monetary Aggregates

Although many countries have abandoned monetary targeting in recent decades, monetary aggregates are still useful indicators of future economic activity. Past research has shown that, compared with other monetary aggregates and expressed in real terms, net M1 and gross M1 have traditionally provided superior leading information for output growth.

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