Money growth data helps predict inflation

Money growth statistics can be used to more accurately forecast inflation in the euro area, a new International Monetary Fund paper finds.

The research also found that the predictive power of money growth for inflation is substantially lower in more recent sample periods compared to the1970s and 1980s.

However, the paper said that quantitative improvements in forecasting accuracy from including money growth were rarely dramatic and cautioned against using money-based inflation models anchored in

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