'Home' base and monetary base rules: elementary evidence from the 1980s and 1990s

No 1997-21, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: This paper evaluates the quantitative importance of removing U.S. currency held abroad from the monetary base. We find that a simple macroeconometric model that uses home base has more explanatory power for changes in nominal income than a model using the total base. Moreover, proposed base rules for the conduct of monetary policy perform better when the model for home base is employed. The evidence from our elementary exercises suggests that accounting for foreign holdings of U.S. currency may also be important in other contexts.

Keywords: Money; supply (search for similar items in EconPapers)
Date: 1997
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Citations: View citations in EconPapers (5)

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Journal Article: 'Home' base and monetary base rules: elementary evidence from the 1980s and 1990s (2000)
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