This paper analyses the information content of M1 for euro area real GDP since the beginning of the 1980s and reviews theoretical arguments on why real narrow money should help predict real GDP. We find that, unlike in the U.S., in the euro area, M1 has better and more robust forecasting...

Universite catholique de Louvain Faculte des sciences economiques, sociales et politiques Departement des sciences economiques - CORE Essays on aggregation and cointegration of econometric models Andrea...