On the recent divergence between measures of the money supply in the UK

Bruce A Rayton, K Pavlyk

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Abstract

This paper presents evidence that the traditional high correlation between simple sum and Divisia monetary aggregates in the United Kingdom has broken down during the economic crisis. This divergence, coupled with the differential diagnostic values of these measures of money in the past, means that current debates about the appropriate stance of monetary policy should first consider what they regard as an appropriate measure of the money supply.
Original languageEnglish
Pages (from-to)159-162
Number of pages4
JournalEconomics Letters
Volume108
Issue number2
DOIs
Publication statusPublished - Aug 2010

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Keywords

  • simple sum method
  • monetary aggregates
  • divisia
  • measurement

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