Demystifying the Demand and Supply of Money in India

This chapter surveys a selected number of studies that evaluated the demand and supply of money using various theories propounded by Keynes and Freidman. It briefly presents issues relevant to estimating the demand for money and synthesizes information concerning the money demand and supply, by using various determinants like the motives behind differential holding of money, quantity theory of money and monetary policy of the Reserve Bank of India. In addition, it presents attempts to reconcile the demand of money and theory of rational choice in a comparable framework. It aims to provide a reference tool for future research on demand and supply for money in India.