Template-type: ReDIF-Paper 1.0
Author-Name: Katrin Assenmacher
Author-Name-First: Katrin
Author-Name-Last: Assenmacher
Author-Person: pwe101
Author-Name: Stefan Gerlach
Author-Name-First: Stefan
Author-Name-Last: Gerlach
Author-Person: pge41
Title: Money Growth, Output Gaps and Inflation at Low and High Frequency: Spectral Estimates for Switzerland
Abstract: While monetary targeting has become increasingly rare, many central banks attach weight to money growth in setting interest rates. This raises the issue of how money can be combined with other variables, in particular the output gap, when analysing inflation. The Swiss National Bank emphasises that the indicators it uses to do so vary across forecasting horizons. While real indicators are employed for short-run forecasts, money growth is more important at longer horizons. Using band spectral regressions and causality tests in the frequency domain, we show that this interpretation of the inflation process fits the data well.
Length: 35 pages
Creation-Date: 2006
Contact-Email: forschung@snb.ch
File-URL: https://www.snb.ch/en/publications/research/working-papers/2006/working_paper_2006_05
File-Format: text/html
Number: 2006-05
Classification-JEL: C22, E3, E5
Keywords: Spectral regression, frequency domain, Phillips curve, quantity theory
Handle: RePEc:snb:snbwpa:2006-05