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A Review of Literature on Monetary Neutrality - The case of India

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  • Kuek, Tai Hock

Abstract

This paper reviews the literature on monetary neutrality in India from empirical perspectives. Based on monetary neutrality proposition, increment in money supply has no effect on real variables in the long-run. In another words, monetary injection into the economy by the government will not trigger or promote real economic growth as in real gross domestic product (GDP) in the long-run. With monetary neutrality proposition, effectiveness of the current monetary policies in an economy can be examined. For the case of India, mixed results have been obtained on the issue of monetary neutrality.

Suggested Citation

  • Kuek, Tai Hock, 2016. "A Review of Literature on Monetary Neutrality - The case of India," MPRA Paper 71962, University Library of Munich, Germany, revised 13 Jun 2016.
  • Handle: RePEc:pra:mprapa:71962
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    References listed on IDEAS

    as
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    6. Giordani, Paolo, 2001. "Stronger evidence of long-run neutrality: a comment on Bernanke and Mihov," SSE/EFI Working Paper Series in Economics and Finance 441, Stockholm School of Economics, revised 11 May 2001.
    7. Chin-Hong Puah & Muzafar Shah Habibullah & Venus Khim-Sen Liew, 2010. "Is money neutral in stock market? The case of Malaysia," Economics Bulletin, AccessEcon, vol. 30(3), pages 1852-1861.
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    9. Moosa, Imad A., 1997. "Testing the long-run neutrality of money in a developing economy: the case of India," Journal of Development Economics, Elsevier, vol. 53(1), pages 139-155, June.
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    15. repec:idn:journl:v:14:y:2011:i:1h:p:1-26 is not listed on IDEAS
    16. Chin-Hong PUAH,* & Muzafar Shah HABIBULLAH** & Shazali Abu MANSOR*, 2002. "Some Empirical Evidence On The Quantity Theoretic Proposition Of Money In Asean-5," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 18, pages 31-47.
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    18. Tang, Maggie May-Jean & Puah, Chin-Hong & Awang Marikan, Dayang-Affizzah, 2013. "Empirical Evidence on the Long-Run Neutrality Hypothesis Using Divisia Money," MPRA Paper 50020, University Library of Munich, Germany.
    19. Ashra, Sunil & Chattopadhyay, Saumen & Chaudhuri, Kausik, 2004. "Deficit, money and price: the Indian experience," Journal of Policy Modeling, Elsevier, vol. 26(3), pages 289-299, April.
    20. Jin Lee, 2012. "Nonparametric Testing for Long-Run Neutrality with Applications to US Money and Output Data," Computational Economics, Springer;Society for Computational Economics, vol. 40(2), pages 183-202, August.
    21. Puah, Chin-Hong & Habibullah, Muzafar Shah & Lau, Evan & Abu Mansor, Shazali, 2006. "Testing long-run monetary neutrality in Malaysia: Revisiting divisia money," MPRA Paper 31750, University Library of Munich, Germany.
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    More about this item

    Keywords

    Monetary neutrality; literature review; India;
    All these keywords.

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates

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