Structural break, stability and demand for money in India
AbstractThis paper attempts to take a meticulous look on stability of money demand in India Using annual data for period 1953-2007 and the Hansen (1992) and Gregory Hansen (1996) co-integration approaches with structural break. Results of the Gregory Hansen (1996) cointegration analysis show the presence of cointegration in demand for money, real GDP and nominal interest rate with structural break at 1965. Further, study also suggests for downward shift of about 0.33 % around 1965 in the demand for money function and put forward that demand for money is stable except for the period of 1975-1998.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 15425.
Date of creation: 05 Mar 2009
Date of revision:
Money Demand; Cointegration with Structural Break; Stability; Choice of Monetary Instrument;
Other versions of this item:
- Prakash Singh & Manoj K. Pandey, 2009. "Structural Break, Stability and Demand for Money in India," ASARC Working Papers 2009-07, The Australian National University, Australia South Asia Research Centre.
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-30 (All new papers)
- NEP-CWA-2009-05-30 (Central & Western Asia)
- NEP-MAC-2009-05-30 (Macroeconomics)
- NEP-MON-2009-05-30 (Monetary Economics)
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