Modeling the Dynamics of Money Income from a Vector Correction Model

  • Hasan M
N/ACitations
Citations of this article
5Readers
Mendeley users who have this article in their library.

Abstract

The purpose of this paper is to re-examine the empirical relationship among alternative monetary aggregates (M1 and M2), output, prices, interest rates and exchange rates in India. The results of a five-variate vector error correction model are indicative of a bi-directional causality between each of the monetary aggregates and prices. Our findings of a feedback relationship make each of the monetary aggregates a poor intermediate target and informational variable. Moreover, contrary to most recent research in this area, the results are supportive of the real business-cycle view and the Keynesian monetary accommodation hypothesis rather than the monetarists’ theory of the business cycle.

Cite

CITATION STYLE

APA

Hasan, M. S. (2010). Modeling the Dynamics of Money Income from a Vector Correction Model. The Journal of Developing Areas, 43(2), 233–253. https://doi.org/10.1353/jda.0.0067

Register to see more suggestions

Mendeley helps you to discover research relevant for your work.

Already have an account?

Save time finding and organizing research with Mendeley

Sign up for free