An empirical definition of money: some factor analytic evidence for India.

Abstract

Most of the studies on the demand for money in India have not paid due attention to the definition of monetary aggregates to be used therein. It has been the practice in the literature to define money a priori as an aggregate of a set of liquid assets. Researchers have neglected the empirical problems associated with the choice and combination of liquid assets to represent money stock. This paper aims to examine the appropriate money stock to be used as a dependent variable in the context of money demand function in India.-from Authors