Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics

Ram Lal Sharma

Abstract

While using Sims' Methodology we found (in an earlier paper) our conclusion about causality between money and price level to be somewhat ambiguous.

In this paper we have re-examined this issue while using only Granger test. We have found that there exists a unidirectional causality running from M₁ to P (money narrowly defined and price level) on the one hand and from M₃ to P on the other (money broadly defined and price level).

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Ram Lal Sharma

Abstract

The period 1972-74 is characterised by the presence of an inflationary trend. The latter though persistently visible after 1962, waS much different during 1972-74 in that the rate of change of price level became positive - a stage of inflation when the economy deviates from the path of stable moving equi1ibrium. The period, 1972-74 is therefore being termed as that of rapid inflation.

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