{"id":1530,"date":"2023-02-13T16:19:18","date_gmt":"2023-02-13T16:19:18","guid":{"rendered":"https:\/\/www.fiw.ac.at\/publications\/money-demand-and-the-role-of-monetary-indicators-in-forecasting-euro-area-inflation\/"},"modified":"2023-02-13T16:19:18","modified_gmt":"2023-02-13T16:19:18","slug":"money-demand-and-the-role-of-monetary-indicators-in-forecasting-euro-area-inflation","status":"publish","type":"publication","link":"https:\/\/www.fiw.ac.at\/en\/publications\/money-demand-and-the-role-of-monetary-indicators-in-forecasting-euro-area-inflation\/","title":{"rendered":"Money demand and the role of monetary indicators in forecasting euro area inflation"},"content":{"rendered":"\nThis paper examines the stability of money demand and the forecasting performance of a broad monetary aggregate (M3) in predicting euro area inflation. Excess liquidity is measured as the difference between the actual money stock and its fundamental value, the latter determined by a money demand function. The out-of sample forecasting performance is compared to widely used alternatives, such as the term structure of interest rates. The results indicate that the evolution of M3 is still in line with money demand even in the period of the financial and economic crisis. Monetary indi-cators are useful to predict inflation, if the forecasting equations are based on measures of excess liquidity.\n\n","protected":false},"featured_media":0,"menu_order":0,"template":"","jelcode":[27,737,458],"keyword":[739,740,738],"class_list":["post-1530","publication","type-publication","status-publish","hentry","jelcode-c22","jelcode-c52","jelcode-e41","keyword-excess-liquidity","keyword-inflation-forecasts","keyword-money-demand"],"acf":{"year":2013,"month":4,"day":"","volume":"","number":"119","pages":35,"reviewed":"0","citeid":"FIW_WP_119","fiwseries":"FIW Working Papers","event":null},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Money demand and the role of monetary indicators in forecasting euro area inflation - FIW<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fiw.ac.at\/en\/publications\/money-demand-and-the-role-of-monetary-indicators-in-forecasting-euro-area-inflation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Money demand and the role of monetary indicators in forecasting euro area inflation - FIW\" \/>\n<meta property=\"og:description\" content=\"This paper examines the stability of money demand and the forecasting performance of a broad monetary aggregate (M3) in predicting euro area inflation. 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