Does India have a stable demand for money function after reforms? A macroeconometric analysis. Nitin Arora
Математика. Прикладная эконометрика. Научные статьи
Does India have a stable demand for money function after reforms? A macroeconometric analysis
Год выпуска 2016
isbn
Автор произведения Nitin Arora
Жанр Математика
Серия Прикладная эконометрика. Научные статьи
Издательство Синергия
The present study analyzes the stability of the demand for money function in India over the period 1991:M4–2014:M9 using co-integration and Vector Error Correction Mechanism (VECM ) framework. From analysis, it has been observed that there exists a stable demand for money function in India during the post-reforms period, i. e. a long-run relationship does exist between demand for real balances, national output (Yt ), rate of interest (Rt) and exchange rate (ERt). Two variables Yt and ERt have been observed to be affecting demand for real balances positively, while the observed effect of M2 is negative. Thus, the signs and magnitudes of all three regressors have been observed according to a-priori information without any paradoxical situation.