The Dynamics of Money Velocity, External Sectors and Electronic Transactions in India: Connecting dots using Empirical Approach
نویسنده
چکیده
The article presents a study to understand the behavior of money velocity for different money stock measures in India for the period 1982 – 2012 along with the important factors by which they get influenced. The first part checks the random walk hypothesis for money velocity fluctuations. The results show that the velocities do not exhibit random walk behavior which proved to be useful for analysis of money velocity dynamics. The causality tests show that the recent developments in electronic transactions are yet to have an impact on money velocity. The last part analyzes the impact of external sectors which includes the trade, the debt inflows, remittances from abroad, investments in India and the interventions from Reserve Bank of India on money velocity suitably in a VAR (1) framework and responses of the variables in future to shocks in the other variables at present have been analyzed using impulse response functions. Jel code: C220, C530, E510, E520, E470, E170 Copyright © 2014 JAEBR
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