In recent years the behaviour of the income velocity of money in major OECD economies has displayed considerable volatility for both narrow and broad monetary aggregates (Table 1). Velocity in a number of large OECD economies, for example, fell sharply in 1982. Most notably, declines in the...

The international financial linkage block of the OECD Secretariat's multi-country model, INTERLINK, is based on a portfolio balance model of exchange rate determination. International consistency is ensured by cross country restrictions on parameters imposed during estimation (1). However, in an...