The empirical verification of money demand in case of India: Post-reform era

In the evident of globalised world economy and changing economic structure, the traditional policies are required to be close examination. This is true particularly in case of developing countries, like India where new economic policies have had been changing visibly since 1990s. Therefore, in the new economic policy regime one of the important building block of policy is the money demand, which needs to be examined again. Present study examines the stability issues of money demand in case of India, using quarterly data from 1996:Q2 to 2016:Q3. With the help of autoregressive distributed lag model (ARDL) or bounds testing approach of cointegration, it has been concluded that there exists stable long run relationship among variables under consideration in the post reform period.