El dinero como indicator lider

Abstract

For policy makers and business cycles analysts is important to count on variables that anticipate points of inflection in economic activity. This paper studies aggregate real money balances as leader indicator of the economic activity based on a Probit model, time series analysis and two Granger-type causality tests for cointegrated data. Our main conclusion is that there is not enough evidence to support the hypothesis of real money shocks preceding future output movements in the Chilean economy. The results of the tests performed in this paper recommend careful examination of econometric models that rely on real money as a right hand side variable of an output equation.