01681cas a2200241 a 4500 AALejournalIMF010023 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451957341 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. The Dynamics of Money Demand and Prices. Washington, D.C. : International Monetary Fund, 1990. 1 online resource (50 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The paper evaluates whether a monetary aggregate can serve as a useful predictor of inflation, using recent developments in the principle of cointegrated variables. M2 but not M1 is cointegrated with relevant price, transactions, and rate of return variables. However, deviations of M2 from its long-run equilibrium value do not significantly enhance inflation forecasts based on conventional output-gap models, a result that stands in contrast to the Federal Reserve's P* relationship. Nevertheless, changes in M2 do contain information about future inflation, consistent with the view that the demand for money reflects the forward-looking behavior of private agents. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1990/075 Full text available on IMF http://elibrary.imf.org/view/journals/001/1990/075/001.1990.issue-075-en.xml IMF e-Library