Demand for Money under Economic Reforms in India: A Further Empirical Evidence

The main objective of this paper is to explain the interface between determinants of demand for money and economic reforms in India, and the policy concerns it engenders. The analysis shows that lhe monetary policy actions under economic reform in India have mixed effects on the determinants of demand for money in various functional combinations. Though it supports the hypothesis that the inteiface between money market rate as the determinant of demand for money and economic reform is favorable and encouraging, it is unfavourable in the case of other determinants such as bond yield rate and expected rate of inflation. Thus, monetary actions in India have been regulating the broad money in an effective manner through changes in the money market rate during the reform period.