TY  - JOUR
AU  - Rotemberg,Julio J.
AU  - Driscoll,John C.
AU  - Poterba,James M.
TI  - Money, Output and Prices:  Evidence from A New Monetary Aggregate
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3824
PY  - 1996
Y2  - March 1996
UR  - http://www.nber.org/papers/w3824
L1  - http://www.nber.org/papers/w3824.pdf
N1  - Author contact info:
Julio J. Rotemberg
Graduate School of Business
Harvard University, Morgan Hall
Soldiers Field
Boston, MA  02163
Tel: 617/495-1015
Fax: 617/496-5994
E-Mail: jrotemberg@hbs.edu

John C. Driscoll
Federal Reserve Board
20th and Constitution Ave., NW
Washington, DC 20551
Tel: (202)452-2628
Fax: (202)452-2301
E-Mail: John.C.Driscoll@frb.gov

James M. Poterba
Department of Economics
MIT, E52-350
50 Memorial Drive
Cambridge, MA  02142-1347
Tel: 617/253-6673
Fax: 617/258-7804
E-Mail: poterba@nber.org
AB  - This paper develops a new utility-based monetary aggregate which we label the currency equivalent aggregate. This aggregate equals the stock of currency that would be required for households to obtain the same liquidity services that they get from their entire collection of monetary assets. We compare the ability of the new aggregate and conventional aggregates, such as Ml and M2, and other indicators of monetary policy to forecast real activity. The CE aggregate has more predictive power for output and prices than standard aggregates, and the time path of the estimated output response is more consistent with broad classes of theoretical models.
ER  -