Modeling the Dynamics of Money Income from a Vector Correction Model

Hasan, Mohammad S (2010) Modeling the Dynamics of Money Income from a Vector Correction Model. Journal of Developing Areas, 43 (2). pp. 233-253. ISSN 0022-037X . (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided)

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Official URL
http://dx.doi.org/10.1353/jda.0.0067

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.

Item Type: Article
Subjects: H Social Sciences
Divisions: Faculties > Social Sciences > Kent Business School > Accounting and Finance
Depositing User: Rebecca Stevenson
Date Deposited: 06 Jan 2010 11:09
Last Modified: 14 Apr 2014 15:47
Resource URI: https://kar.kent.ac.uk/id/eprint/23564 (The current URI for this page, for reference purposes)
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