Money, Measurement and Computation

WILLIAM A. BARNETT Professor, Department of Economics, University of Kansas, USAJOHN R. CONLON Department of Economics, University of Mississippi, USAERWIN DIEWERT Professor of Economics, The University of British Columbia, CanadaKIERAN P. DONAGHY Associate Professor of Urban and Regional Planning, University of Illinois, USAROBERT E. DORSEY Department of Economics and Finance, University of Mississippi, USAC. T. ELGER Department of Economics, School of Economics and Management, Lund University, SwedenDENNIS FIXLER Chief Statistician, Bureau of Economic Analysis, US Department of Commerce, USAMELVIN HINICH Mike Hogg Professor of Government and Professor of Economics, University of Texas, USABARRY E. JONES Assistant Professor, Department of Economics, Binghamton University, New York, USAMILKA KIROVA Department of Economics, Saint Louis University, USALISBETH LA COUR Department of Economics, Copenhagen Business School, DenmarkWALTER MAYER Department of Economics and Finance, University of Mississippi, USATRAVIS D. NESMITH Government of the United States of America - Payment System Studies Section, Washington DC, USAMEENAKSHI PASUPATHY Assistant Professor of Economics and Finance, School of Zicklin Business, Baruch College, The City University of New York, USADOUGLAS M. PATTERSON Professor of Finance, Pamplin College of Business, Virginia Polytechnic Institute and State University, USADENIS M. RICHARD IZI Metodi, Analizi e Valutazioni Economiche, Rome, ItalySARANNA ROBINSON THORNTON Elliott Associate Professor of Economics, Hampden-Sydney College, USATIM J. WALES Department of Economics, University of British Columbia, CanadaNORMAN K. WOMER Retired Director of the Hearin Center for Enterprise Science and Professor of Production Operations Management, University of Mississippi, USAKIM ZIESCHANG International Monetary Fund, USA

In this book leading researchers from universities around the world bring together new ideas on measurement and computation of indices for the financial sector. The book is divided into three parts. The first part contains two chapters which present particularly new ideas and applications on models of the supply and demand for monetary assets in the UK. The first paper explores some of the more popular cases in which cointegration is used as a basis for the construction of linear models and, and runs tests for nonlinearity of the linear combination of the cointegrated variables. The second, estimates the money aggregator function, using a new functional form that has a number of properties which make it useful for representing money aggregator functions. The second part contains five chapters on new approaches to hypothesis testing and data analysis. This includes a new approach to the smoothing problem and developing tests for a global maximum. The final section considers problems of money measurement and debates issue central to the performance of Divisia monetary aggregates. The conclusions are that Divisia monetary aggregates outperform their simple sum counterparts in a range of applications.

Provides new approaches and research in hypothesis testing and data analysis

Introduction; J.Binner & C.T.Elger PART 1: MODELS OF THE SUPPLY AND DEMAND FOR MONETARY ASSETS IN THE UK The Nonlinear Skeletons in the Closet; W.A.Barnett, B.E.Jones, M.Kirova, T.D. Nesmith & M.Pasupathy A Flexible Generalization of the CES Functional Form, with Applications to Monetary Data and A Test for Separability; J .R.Conlon, R.E.Dorsey & N.K.Womer PART 2: NEW APPROACHES TO HYPOTHESIS TESTING AND DATA ANALYSIS Detecting Epochs of Transient Dependence in White Noise; M.J.Hinich & D.M.Patterson Estimating a Regular Continuous-Time System of Demand for World Monies with Divisia Data; K.P.Donaghy & D.M.Richard A 'New' Approach to the Smoothing Problem; W.E.Diewert & T.J.Wales Tests for a Global Maximum; R.Dorsey & W.Mayer Economic Statistics and the Transmission of Monetary Policy to the Real Economy; D.Fixler & K.Zieschang PART 3: INDEX NUMBERS FOR THE FINANCIAL SECTOR The Problem of Measuring 'Money': Results from an Analysis of Divisia Monetary Aggregates for Denmark; L.la Cour Simple-sum versus Divisia Measures of Money as Policy Instruments in an Adaptive Monetary Rule; S.Robinson Thornton The Neglected Price Dual of Monetary Quantity Aggregates; M.T.Belongia