A Re-Examination of the Long-Run Relationship between Money Supply and Inflation in India
AbstractThe present study tries to examine the long-run relationship between money supply and prices in the Indian context with the help of both annual data for the period 1953 to 1998 and with the help of monthly data for the period 1993:1 to 1998:12. The present study finds that there still exists a strong influence, though not immediate, of money supply on the price changes in India in the long run. It was also found that money supply is not exogenous and is influenced by prices and output. The results certainly raise doubts about shifting the focus from money supply to interest rates by RBI. The shift to interest rate targeting is not supported by this study. Financial liberalisation has not made income velocity of money unstable in India. Monetary targeting is still useful.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for Social and Economic Change, Bangalore in its series Working Papers with number 83.
Length: 28 pages
Date of creation: 2001
Date of revision:
Money Supply; Inflation Rate;
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (B B Chand).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.