Citing a break in the statistical association between the broader money aggregates and reserve money in the the post-reforms period of the 1990s vis-a-vis the 1980s, this paper argues that an endogenous money multiplier framework is best suited for analyzing the money supply process in India and questions the simplifying assumptions tending to justify stability and predictability of the money multiplier especially in the context of a deregulated financial system with market determined interest rates. An empirical analysis conducted using monthly data for the period April 1980 through March 2000 establishes this and traces the source of the endogeneity of these multipliers to a range of macroeconomic variables.
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Paper provided by Australian National University, Economics RSPAS in its series Departmental Working Papers with number
2001-01.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Freeman, Scott & Huffman, Gregory W, 1991.
"Inside Money, Output, and Causality,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 645-67, August.
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