This paper discusses the effect of cross-border deposits (CBDs) for the stability of the relation between monetary aggregates and nominal GDP in the five largest EC countries. The analysis is developed in terms of “information content” of alternative money definitions (including or excluding selected subsets of CBDs), derived from a multicountry simultaneous system of money demand equations. We show that in the most recent period traditional money aggregates have lost information value and that they are dominated by alternative money definitions that include CBDs, such as those based on the residency of the holder or on the currency of denomination.
This paper discusses the effect of cross-border deposits (CBDs) for the stability of the relation between monetary aggregates and nominal GDP in the five largest EC countries. The analysis is developed in terms of quot;information contentquot; of alternative money definitions (including or excluding selected subsets of CBDs), derived from a multicountry simultaneous system of money demand equations. We show that in the most recent period traditional money aggregates have lost information value and that they are dominated by alternative money definitions that include CBDs, such as those based on the residency of the holder or on the currency of denomination.
This paper provides a dataset on the currency composition of the international investment position for a group of 50 countries for the period 1990-2017. It improves available data based on estimates by incorporating actual data reported by statistical authorities and refining estimation methods. The paper illustrates current and new uses of these data, with particular focus on the evolution of currency exposures of cross-border positions.
This 2003 book offers the most systematic analysis available of the impact of European Central Bank monetary policy on the national economies of the Eurozone. Analysing macro and micro-economic evidence, with chapters by central bank economists, including a discussion chapter by eminent macroeconomists, it is an essential contribution to research on the subject.
The Maastricht Treaty makes the convergence of inflation rates one of the preconditions of European Monetary Union (EMU). The purpose of this study is to shed light on the mechanism underlying the processes that lead to convergence or divergence in national inflation rates. It examinesinflation and wage bahaviour in the European Monetary System (EMS), their determinants, and their implications for the credibility and sustainability of the system's exchange rate mechanism (ERM). Although the focus is on the EMS period, eleven of the twelve studies also review the background of the1970s. The contributors examine issues of monetary control, stability of national and ERM-wide money-demand function, the monetary policy of Germany - the pivotal country in the EMS - and its influence on the stability of the system after the fall of the Berlin Wall. As well as explaining how theEMS worked, the book also offers reasons for its breakdown in 1992-3 under the blow of exogenous shocks and growing policy conflict between member countries.The study identifies several causes of inflation and persistent inflation differentials in the EMS. Among the 'real' causes, particular attention is devoted to sectoral productivity shocks. In some countries, import price shocks, exogenous wage pushes, taxes, and government expenditure are bound tobe important factors. Since theses kinds of shock hit the various economies of the region differently, inflation differntials can persist for several years. The different policies of governments and central banks, and the fact the monetary policies have not always been consistent with the long-runmaintenance of fixed exchange rates, have also played a considerable role in explaining the persistance of inflation differentials.
