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Estimating the trend of M3 income velocity underlying the reference value for monetary growth

Author

Listed:
  • Brand, Claus
  • Gerdesmeier, Dieter
  • Roffia, Barbara
Abstract
This paper documents the analytical work that was carried out for the 2001 review of the assumption for the trend in M3 income velocity used to calculate the reference value for M3 growth. We analyse the medium-term trend in velocity using univariate time series tools and different money demand models. In addition, some cross-checking is carried out to address data compilation issues related to the accession of Greece in 2001 and to different weighting schemes used to aggregate historical euro area data. It is found that the trend decline in M3 income velocity over the medium term is within a range of 1/2% to 1% per year.

Suggested Citation

  • Brand, Claus & Gerdesmeier, Dieter & Roffia, Barbara, 2002. "Estimating the trend of M3 income velocity underlying the reference value for monetary growth," Occasional Paper Series 3, European Central Bank.
    • Handle: RePEc:ecb:ecbops:20023
    Note: 92649
    as

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    File URL: https://www.ecb.europa.eu//pub/pdf/scpops/ecbocp3.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    income; M3; M3 income velocity; monetary growth;
    All these keywords.

    JEL classification:

    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising
    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising

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