Inflation forecasts based on money growth proved accurate in 2021, though generally unreliable

Abstract: As money demand changes, and in particular as money velocity fluctuates with interest rates, this relationship can become unstable with money growth providing limited useful information for inflation forecasting.

Keywords: monetary policy; inflation; COVID-19; forecasting;

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Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Source: Dallas Fed Economics

Publication Date: 2024-02-20