Cross-Border Deposits and Monetary Aggregates in the Transition to EMU

Author/Editor:

Ignazio Angeloni ; Aviram Levy ; Carlo Cottarelli

Publication Date:

November 1, 1991

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 1991/114

Subject:

Currencies Demand for money Monetary aggregates Monetary base Money National accounts Personal income

English

Publication Date:

November 1, 1991

ISBN/ISSN:

9781451853742/1018-5941

Stock No:

WPIEA1141991

Pages:

60

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