Working Paper No. 9
By Paul Fisher, Suzanne Hudson and Mahmood Pradhan
Increasing interest has been shown in recent years in index number measures of money which weight the different components within each monetary aggregate. This paper presents an assessment of Divisia measures of money including an appraisal of the theoretical arguments for the Divisia approach to monetary aggregation. It also describes the construction of a Divisia index for the United Kingdom and discusses the potential relevance of Divisia for the assessment of monetary conditions.