This paper evaluates the quantitative importance of removing U.S. currency held abroad from the monetary base. We nd that a simple macroeconometric model that uses home base has more explanatory power for changes in nominal income than when the total base is used. Moreover, proposed base rules...

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...