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at Austin, was a visiting scholar at the Federa/ Reserve Bank of St. Louis when this artic/e was written. Lynn Dietrich and Kevin White provided research assistance. An Extended Series of Divisia Monetary Aggregates rj-i I HE CONVENTION IN monetary economics has been to create monetary aggregates by simply adding together the dollar amounts of the various financial assets included in them. This is the simple-sum method of aggregation. This procedure has been criticized because such monetary aggregates are essentially indexes that weight each component financial asset equally, a practice that is economically meaningful only under special circumstances. A number of alternative indexes of monetary aggregates have been developed recently. The most well known are the Divisia monetary aggregates developed by Barnett (1980). This article reviews the theoretical basis for monetary aggregation and presents series of Divisia monetary aggregates for an extended sample period. The behavior of the simple-sum aggregates and their Divisia counterparts are compared over this period.

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