Eika, Kari H.; Ericsson, Neil R.; Nymoen, Ragnar - 1998
Some recent studies have suggested constructing a Monetary Conditions Index (or MCI) to serve as an indicator of …-term focuses of policy--economic activity and inflation. This paper derives analytical and empirical properties of MCIs in an … inflation to the variables in the MCI. Several issues arise for that model, including its empirical constancy, cointegration …