Evidence from a new currency equivalent monetary aggregate for India
Evidence from a new currency equivalent monetary aggregate for India
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Date
2007-01-01
Authors
Acharya, Debashis
Gopalaswamy, Arun Kumar
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Abstract
This paper empirically examines the properties of a new weighted monetary aggregate, Currency equivalent monetary aggregate (CEMA) for India using the components of a broad monetary aggregate NM3 recommended by the working group on Money Supply, Analytics and Methodology of Compilation, Reserve Bank of India (RBI, 1998). The empirical properties of this aggregate via a money demand function are compared with its simple sum counterpart NM3. The results suggest the superiority of the CEMA over NM3.
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Keywords
Cointegration,
Monetary aggregate,
Money demand
Citation
Banks and Bank Systems. v.2(4)