ABSTRACT
We test the correlation between the quantity of broad money and the CPI in levels in our sample of 42 countries from 1960 to 2020. There is a positive trend in both variables in all countries. The relationship is significantly tighter in some countries than others; however, a number of commonly used (weak) unit root tests with different specifications do not reject the unit root. Dynamic OLS regressions for every country show that the relationship between money and the CPI, however, is not exactly one-to-one in all 42 countries; it is very close to that in many cases.
