The Federal Reserve Board eagle logo links to home page
Finance and Economics Discussion Series
The Finance and Economics Discussion Series logo links to FEDS home page `Home' Base and Monetary Base Rules: Elementary Evidence from the 1980s and 1990s
Philip N. Jefferson
1997-21


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: Currency abroad, monetary base, nominal income

Full paper (216 KB PDF) | Full paper (210 KB Postscript)


Home | Economic research and data | FR working papers | FEDS | 1997 FEDS papers
Accessibility
To comment on this site, please fill out our feedback form.
Last update: July 16, 1997