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Measuring monetary conditions in Europe: use and limitations of the monetary conditions index. MRPA Paper No. 23534, 1999

Peeters, Marga (1999) Measuring monetary conditions in Europe: use and limitations of the monetary conditions index. MRPA Paper No. 23534, 1999. UNSPECIFIED.

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    Abstract

    The Monetary Conditions Index is a composite index of interest and exchange rates frequently used by central banks, the IMF, and the OECD. This paper considers the benefits and weaknesses of the MCI in the light of large macroeconometric models. It follows that the impact of the exchange rate on GDP relative to the impact of the short-term interest rate is substantially lower under a monetary union. For most countries, including a long-term interest rate in the MCI only affects the level of the MCI and not its turning points.

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    Item Type: Other
    Uncontrolled Keywords: Monetary Conditions Index; EMU.
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > monetary policy
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 24 Nov 2011 14:13
    Number of Pages: 23
    Last Modified: 24 Nov 2011 14:13
    URI: http://aei.pitt.edu/id/eprint/32992

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