The Demand for Money and Financial Innovation: An Empirical Verification in India

Masudul Hasa Adil, Neeraj Hatekar and Pravakar Sahoo ()
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Pravakar Sahoo: Institute of Economic Growth, Delhi

No 380, IEG Working Papers from Institute of Economic Growth

Abstract: Vulnerability to poverty, which broadly captures the susceptibility to becoming poor in the future, has become an integral part of any deprivation assessment. In this paper we take a fresh look at measuring vulnerability, where we separate out the identiÖcation part of whether an individual is vulnerable, from the aggregation part which measures the level of vulnerability of the individual. In doing so, we also take into account the substantial informational challenges that one faces in the context of measuring vulnerability. These challenges lead us to propose identiÖcation rules which are not too demanding in terms of information. We axiomatically characterise several identiÖcation rules and a widely used measure of vulnerability. This allow us to have a deeper insight into normative judgements behind those criteria. Further, we provide an empirical illustration of the identification and measurement rules proposed in this paper using real world data from Bangladesh.

Keywords: ARDL; CUSUM and CUSUMQ; co-integration; financial innovation; India; money demand function (search for similar items in EconPapers)
JEL-codes: E41 E42 E44 E52 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2019
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Published as Institute of Economic Growth, Delhi, 2019, pages 1-30

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Persistent link: https://EconPapers.repec.org/RePEc:awe:wpaper:380

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