The New Monetary Aggregates.

The article focuses on a study on the definition and estimation of monetary aggregates conducted by a U.S. Federal Reserve System advisory committee. Aggregates proposed by the board staff are described and analyzed, and an extended analysis of transitory and seasonal variations in the monetary statistics is presented. The author also considers whether nonbank repurchase agreements should be included in money measures. The two necessary operations in the construction of a monetary aggregate are discussed. Elasticities of substitution among potential components must first be estimated to include the individual aggregate items. Second, the chosen components must be added together, typically by summing them.