Monetary Aggregates as Monetary Targets: A Statistical Investigation.

In this paper, the authors analyze statistical properties of the monetary base, M1, and M2 for the postwar U.S. data record. The authors are specifically interested in answering three policy-related questions. First, to what extent do these monetary aggregates contain information useful for predicting movements in prices and real output? Second, how do the aggregates rank as to their predictive usefulness? Third, how do these aggregates rank as to the stability of their relationship to the macroeconomy? Copyright 1992 by Ohio State University Press.