This paper, therefore, uses quarterly data for the period of 1996 to 2013 to estimate India's money demand function, which is derived from real money balances, real interest rates and output and shed light on its characteristics.
Lastly, analysis results are used to discuss the characteristics of India's money demand function and the implications for India's monetary policy.
This can again be seen in analogy to the interest rate driven speculative money demand in Keynesian theory.
Both the hypotheses include the implicit assumption that overall money demand stays constant.
The money stock in an economy is determined by the interaction of forces money demand
and money supply.
The ARDL bound test approach allows consistent estimation on the nexus of financial liberalisation with money demand
for both long run and short run.
This paper examines the quarterly observations of the 1993-2009 period and uses cointegration analysis and an error correction model (ECM) to estimate money demand
functions in order to analyze the long-term effects and short-run dynamics in the money demand
For example, higher real incomes or declining opportunity costs of holding money generate a higher money demand
7 and a negative interest rate elasticity as suggested by standard money demand
analysis, the estimates for M1 indicate very low price elasticities of approximately 0.
We follow this approach in our study by identifying a money-multiplier shock that captures unexpected changes to demand for currency and the demand for reserves, a real money demand
shock, and a monetary policy-induced shock to the monetary base.
Traditionally, stock market prices have not been considered as a determinant of the money demand
function until Friedman (1988) showed its relevance.
Some of the previous studies on money demand
have neglected the role of foreign monetary developments.
Nevertheless, reflecting the view that the demand for money became unstable in the early 2000s, some commentators have reported that the ECB has "downgraded" the role of money demand
functions in its strategy.
In this paper, we quantify welfare costs of inflation for Pakistan for the period 1960-2007 using semi-log and double-log money demand
Big money demands
big performances, and our clubs have to face that challenge, and show us that they can mix it with the very best.