While there has been some debate over the usefulness of monetary aggregates, there has been surprisingly little discussion of the actual implications for liquidity. In this paper, we provide an approximation of the liquidity development in six Euro area countries from 2003 to 2012. We show that...

Simple sum monetary aggregates are based on accounting conventions and have no aggregation theoretic foundations in economic theory. In contrast, Divisia monetary aggregates are directly derived from aggregation and index number theory. Credit card services cannot be included in simple sum...

Microeconomics, Macroeconomics, Trade, Welfare Economics,Finance Theory, Capital Theory, Revealed Preference, Overlapping,Generations

This paper provides a framework for the early assessment of current U.S. nominal GDP growth, which has been considered a potential new monetary policy target. The nowcasts are computed using the exact amount of information that policy-makers have available at the time predictions are made....

This paper compares the "simple-sum" monetary aggregates (M1 and M2) published by the Saudi Arabian Monetary Agency (SAMA) with the new monetary aggregates (D1 and D2)-known as the Divisia monetary indexes. The former aggregates are constructed from a simple accounting identity, whereas the...

Since Barnett derived the user cost price of money, the economic theory of monetary services aggregation has been developed and extended into a field of its own with solid foundations in microeconomic theory. Divisia monetary aggregates have repeatedly been shown to be strictly preferable to...

The purpose of this paper is to estimate the relationship among a primary set of economic variables, including two types of monetary aggregates: simple sum M2 and credit-card-augmented Divisia inside money services. The importance of that comparison has grown as the use of credit cards in...