EU-WIDE MONEY AND CROSS-BORDER HOLDINGS

The paper explores the economic properties of several measures of EU-w ide money that include different definitions of cross-border holdings (CBHs). 'Very broad' aggregates are poorly linked with EU-wide income and price developments; in contrast, the demand for aggregates which i s 'focused on the European Union' (which hinge on the inclusion of CBH s denominated in EU currencies and/or kept within the EU) is shown to be stable and predictable. Although aggregates extended to include CBH s do not yet outperform the traditional measure of broad money, they a re likely to become an increasingly important tool for monetary analys is at the EU level.