The more relevant issue is how this should best be done, that is, how monetary aggregates should feature in the monetary policy design. Here, the challenging task for monetary analysis is how to separate in real time the noise in the shortrun development of monetary aggregates from the part of monetary dynamics that signals risks to future price stability.
Monetary analysis, properly understood and implemented, can not be a mechanical forecasting exercise. It has to take into account the possibilities of money demand shocks injecting noise into the liquidity-inflation nexus or possible structural shifts in money demand relations. Up-to-date monetary analysis should be a broadly-based approach and an ongoing intellectual endeavour.