This thesis is an empirical comparison of the relationship between money and other key economic variables and investigates an alternative method of defining money in Canada. Severe theoretical problems with traditional monetary aggregation methods are identified and Divisia aggregates are examined through the use of index number and aggregation theory. Summation and Divisia aggregates are constructed, tested and compared in three critical areas: information content, causality and stability. In particular this thesis investigates whether Divisia money is a potentially useful indicator of economic conditions. The data consists of Canadian quarterly observations for the period 1968.1 to 1989.4 for 26 different monetary assets and their own rates of return. The Divisia indices do not clearly outperform their summation counterparts but do show consistent and stable growth trends during the period in question. The results show that Divisia monetary aggregation is theoretically more appealing than the simple sum approach and that Divisia money provides meaningful information for Canadian monetary policy.
| Identifer | oai:union.ndltd.org:LACETR/oai:collectionscanada.gc.ca:QMM.22623 |
| Date | January 1995 |
| Creators | Pusch, John J. |
| Publisher | McGill University |
| Source Sets | Library and Archives Canada ETDs Repository / Centre d'archives des thèses électroniques de Bibliothèque et Archives Canada |
| Language | English |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Format | application/pdf |
| Coverage | Master of Arts (Department of Economics.) |
| Rights | All items in eScholarship@McGill are protected by copyright with all rights reserved unless otherwise indicated. |
| Relation | alephsysno: 001460436, proquestno: MM05422, Theses scanned by UMI/ProQuest. |
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