We examine the indicator property of the monetary indicator for inflation. Using a P*-model, Svensson shows …

This paper addresses the relative importance of monetary indicators for forecasting inflation in the euro area in a … estimation of inclusion probabilities of a particular variable, that is the probability of that variable being in the forecast … empirical question whether the group of monetary variables is relevant for forecasting euro area inflation. In our application …

There is a broad consensus among economists that, in the long run, inflation is a monetary phenomenon. However … inflationary processes. Moreover, impulses from monetary policy actions are transmitted to inflation through the output gap alone …. Interest rate impulses affect inflation through two channels, the output gap and the liquidity gap. Section 2 of the paper …