201. Constructing Divisia Monetary Aggregates for the Asian Tigers.
- Author
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Barnett, William A., Lee, JongSoo, and Mohiuddin, Naowar
- Subjects
VECTOR error-correction models ,MONEY supply ,ECONOMIC shock ,POLICY analysis ,EMPIRICAL research - Abstract
This study constructs Divisia monetary aggregates for the "Asian Tigers"—Hong Kong (1999–2024), South Korea (2009–2024), Singapore (1991–2021), and Taiwan (2005–2024)—and assesses whether Divisia monetary aggregates explain nominal GDP better than simple-sum money. Our findings demonstrate that Divisia indices respond more sensitively to economic shocks. For Hong Kong and Taiwan, narrow Divisia money provides the best explanations for fluctuations in nominal GDP. Our results suggest that Divisia monetary aggregates can be beneficial for monetary policy analysis in these territories and underscore the importance of further research into the empirical performance of Divisia monetary aggregates in macroeconomic prediction. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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