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Determinant of Money demand in India


Zannah, Mohammmed and Ramly, Ashadi and Mahat, Fauziah (2017) Determinant of Money demand in India. Qualitative and Quantitative Research Review, 2 (2). 31 - 53. ISSN 2462-1978; ESSN: 2462-2117


This study empirically examined the Money demand in India to find the stability of money demand between narrow money M1, M2 and Broad money M3 as a prerequisite for achieving sound monetary policy. The monthly data from January 2006 to July 2016 were used for this studies. To determine the relationship between the variables and the stability of the money in India, the study employed Autoregressive Distributed Lag (ARDL) method to analysis the data. The result shows that both narrow (M1, M2) and broad money (M3) are co-integrated with the determinants however it is not significant in long run, except for income as the key factor influences the broad money. Applying CUSUM & CUSUMSQ, the parameter stability test yield that narrow and broad money demand are stable for India.

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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Publisher: Niali Field Consultancy and Training (NFCT)
Keywords: Money demand; Co-integration; Stability; ARDL; India JEL Classification: E41, C22, C52
Depositing User: Nurul Ainie Mokhtar
Date Deposited: 22 May 2018 02:40
Last Modified: 22 May 2018 02:40
URI: http://psasir.upm.edu.my/id/eprint/61413
Statistic Details: View Download Statistic

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