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Original Articles

Unit roots cointegration and the demand for money in India

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Pages 397-399 | Received 31 May 1995, Published online: 02 Nov 2006
 

Abstract

It is shown that the variables in the demand for money in India are unit root variables. Therefore the long- and short-run money demand functions are estimated using cointegration methods and error correction formulation. It is found that the long-run income and interest rate elasticities are about 1.5 and −0.42 respectively.

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