Predictive powers of divisia monetary aggregates and simple sum money on inflation: comparative evidence from Malaysia

Lim,, Kok Shyong. (2007) Predictive powers of divisia monetary aggregates and simple sum money on inflation: comparative evidence from Malaysia. [Project Report] (Unpublished)

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PREDICTIVE POWERS OF DIVISIA MONETARY AGGREGATES AND SIMPLE SUM MONEY ON INFLATION COMPARATIVE EVIDENCE FROM MALAYSIA(24 pgs).pdf

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Abstract

The weaknesses of simple sum monetary aggregates in both aggregation theory and linkages to macroeconomic variables ultimately led to monetary targeting being replaced by other methods such as inflation targeting and interest rate targeting as monetary policy tools. However, innovation in monetary aggregation theory led to the introduction of Divisia monetary aggregates as an alternative to simple sum money . By using a P - Star model framework in the context of Malaysia, t his study investigates the performance of Divisia monetary aggregates in predicting inflation ary movements against their simple sum counterpart s. The results showed that Divisia M1 is superior to other monetary aggregates used in this study to forecast future inflationary movements in Malaysia. In addition, the P - Star model of inflation is shown to be a valid empirical model to predict inflation for Malaysia.

Item Type: Project Report
Additional Information: Project Report (B.Sc.) - Universiti Malaysia Sarawak , 2007.
Uncontrolled Keywords: Monetary policy--Economic conditions, UNIMAS, university, universiti, Borneo, Malaysia, Sarawak, Kuching, Samarahan, IPTA, education, research, Universiti Malaysia Sarawak, undergraduate, 2007
Subjects: H Social Sciences > HG Finance
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Depositing User: Karen Kornalius
Date Deposited: 06 May 2015 08:43
Last Modified: 13 May 2015 04:20
URI: http://ir.unimas.my/id/eprint/6466

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