The Central Bank of UAE's Monetary aggregates
, which include currency in circulation outside banks plus monetary deposits and quasi-deposits and government deposits, referred to as M3, increased 0.2 percent by the end of April 2019, hitting Dh1.636 trillion ($446 billion) against Dh1.632 trillion the month before, according the UAE Monthly Monetary Survey of April released today (May 21).
The monetary aggregate
targeting also received criticism due to the upsurge in inflation in Pakistan along with the success stories of inflation targeting regimes followed by various countries.
In the world of Milton Friedman, prior to 1981, given the existence of a monetary aggregate
(M1), which was interest insensitive and stably related to nominal output (GDP), the robust correlation was that monetary decelerations preceded business cycle peaks.
According to the monetarist concept, there are relationships tested between monetary base (MB) and monetary aggregate
(M2), monetary aggregate
and industrial production index (IP_CR), and monetary aggregate
and consumer price index (CPI).
Christiano and Eichenbaum (1992) and Uhlig (2005) use non-borrowed reserves as the monetary aggregate
. Here we employ M2 as the monetary aggregate
because M2 growth is closely monitored by the monetary authorities of Taiwan, who have never targeted non-borrowed reserves as a strategy of money policy.
(6) Even more tellingly, the short statement that the FOMC releases after every meeting to explain its actions has never made a reference to a monetary aggregate
since these statements were first issued in 19947 And, according to the latest transcripts of FOMC meetings that have been released to the public, FOMC members seldom mentioned the monetary aggregates
in their deliberations in 2001.
And yet the Federal Reserve stopped reporting the broadest monetary aggregate
, M3, last year, and the time has long since past that it reported growth rate targets for money aggregates.
He estimates that equilibrium relationship using the monetary aggregate
M1 as the measure of money with data up to 1985 and argues that there is a stable relationship between those variables with a unitary income elasticity and with a strong negative response of real balances to the nominal interest rate (see box 1 for definitions of the different monetary aggregates
(2001; hereafter PSS) to develop an empirically weighted broad monetary aggregate
for the United States and to demonstrate the advantages of this type of aggregate from a monetary policy perspective.
Figure 4 displays the M2 monetary aggregate
, the combination of currency and demand deposits, measured monthly over the 1926-35 period.
In the United States, the favored monetary aggregate
among monetarists, particularly Milton Friedman, during the early to mid-1970s was simple sum M2.
However, monetary targeting in Germany and Switzerland is quite different from a Friedman-type monetary targeting rule, in which a monetary aggregate
is kept on a constant-growth-rate path and is the primary focus of monetary policy.