The monsoon and the market for money in late-colonial India

Tirthankar Roy

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Banking experienced large growth in colonial India along with a process of commercialization of agriculture. Yet, the rate of aggregate saving or investment remained low. This article is an attempt to resolve this paradox. It suggests that traditional forms of banking were helped by the formalization of indigenous negotiable instruments, but that transactions between bankers, merchants, and peasants were characterized by a limited use of legal instruments. The limited circulation of bills in this sphere is attributed, among other factors, to high seasonality in the demand for money. Seasonality-induced distortions in the organization of the money market made indigenous banking an unsuitable agent to promote saving and finance industrialization.

JEL-codes: F3 G3 N0 (search for similar items in EconPapers)
Date: 2016-06-01
New Economics Papers: this item is included in nep-his, nep-mon and nep-pay
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Citations: View citations in EconPapers (1)

Published in Enterprise and Society, 1, June, 2016, 17(02), pp. 324-357. ISSN: 1467-2227

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http://eprints.lse.ac.uk/67418/ Open access version. (application/pdf)

Related works:
Journal Article: The Monsoon and the Market for Money in Late-colonial India (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:67418

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