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

M. Thomas Paul ¹, Hemanta K. Pradhan ²

Affiliations
1 National Institute of Bank Management, Pune, IN
2 Institute for Financial Management and Research, Madras, IN

Abstract

Quarterly data for India for the period 1973 to 1983 support the existence of an 'Expectation Augmented Phillips Curve'. Our results contradict the hypothesis of the New-classical economists that unanticipated money growth leads to a sudden jump in price level and subsequently only to outout growth. We have, on the other hand, found much empirical support for the Buffer-stock approach to money. In India for this period there is much evidence for the 'Imported Inflation'. It appears that small but continuous exchange-rate depreciation during the period of study for India has not led to inflation.

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Bandi Kamaiah , Parameswar Nandakumar , Hemanta K. Pradhan

Abstract

The earlier studies on the random walk behaviour of exchange rates used various tests of market efficiency which were developed to analyse stock markets [Poole (1967), Burt et al (1977)], In general, these studies found that floating exchange rates had not followed a random walk, a stochastic process in which successive changes are serially correlated.

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