- Page 1 and 2: IMPACT OF MONETARY POLICY ON INDIAN
- Page 3 and 4: DECLARATION I declare that the thes
- Page 5 and 6: Palayam, Centre for Development Stu
- Page 7 and 8: 2.2.2. Contemporary Monetary Theory
- Page 9 and 10: VI. MONETARY POLICY IN INDIA 268 6.
- Page 11: Table No Title VI.18. Gross Domesti
- Page 15 and 16: Money markets facilitate the conduc
- Page 17 and 18: 2. To examine the effectiveness <st
- Page 19 and 20: The last chapter provides the summa
- Page 21 and 22: For sustaining the high growth path
- Page 23 and 24: an instrument to generate additiona
- Page 25 and 26: commercial sector. Otherwise, infla
- Page 27 and 28: Ranjanendra Narayan Nag and Mallina
- Page 29 and 30: the allowed objective of</s
- Page 31 and 32: the foreign exchange market is at b
- Page 33 and 34: Banking and stock market systems ar
- Page 35 and 36: conduct of <strong
- Page 37 and 38: Monetary policy is
- Page 39 and 40: is a systematic response in the Res
- Page 41 and 42: anking system. Monetary pol
- Page 43 and 44: References 1. Reserve Bank
- Page 45 and 46: 28. Manohar Rao, 2000. ‗Fiscal De
- Page 47 and 48: 53. Shankar Acharya, 2002. ‗Macro
- Page 49 and 50: CHAPTER -II MONETARY THEORY AND POL
- Page 51 and 52: money. (4) Johnson (1969) distingui
- Page 53 and 54: and liabilities increase by the sam
- Page 55 and 56: money helps in equalizing the margi
- Page 57 and 58: 5. As a means to capital formation
- Page 59 and 60: 3. Interest rate ceiling was freed
- Page 61 and 62: To conclude, the role of</s
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2.1.7. Money Market in India The mo
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The 182-day Treasury bill was repla
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phased in such a manner that existi
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market, including issues comprising
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2.1.9. The Financial Sector Reforms
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also the characteristic of<
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established demand-and supply analy
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The value of money
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level will be strictly proportional
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deposits (D) of a
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The money supply (M) consists <stro
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employment, rate of</strong
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A. Total Wealth The total wealth is
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Income Friedman‘s quantity theory
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―An irregular simple empirical re
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Finally, even if there is the ‗li
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this model as world occur in a syst
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initial endowments of</stro
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economists believe that like transa
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Thus, the total demand for money ca
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Income; where with the increase in
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interest rate falls. People will, t
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employment is liable to fluctuate.
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atios among financial assets in the
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But, defined in a narrow sense, <st
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(2) Economic growth (3) Full employ
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monetary p
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Full Employment and Economic Growth
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price stability along with distribu
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This new set of fa
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Market yield on Equity Tobin sugges
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interest rate will rise again and s
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thriftiness, could not, it was argu
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Keynes emphasized that the liabilit
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close and regular relationship betw
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8. Friedman, M. 1970. The Counter R
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40. Friedman, Milton. 1956. The qua
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CHAPTER-III SIGNIFICANCE OF MONETAR
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3.1. ROLE OF MONETARY POLICY IN DEV
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most of investment
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many financial assets each differin
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composite or integrated system. Thi
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Despite the general support and ind
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is not just second best; it may eve
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3.3. SOME MONETARY CONSTRAINTS Ther
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countries. There is little reason t
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to monetary <stron
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ultimate goal variables on the othe
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CHAPTER- IV REVIEW OF MONETARY POLI
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currency reserves to $6.4 billion a
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public action. The balance
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4.4. MONETARY POLICY 1994-95 The ye
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of growth
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control money growth. The cash rese
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With regard to industrial productio
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atio of 1.7 per ce
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was restored with the sentiment imp
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eserves by over US $ 2.4 billion du
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government administrative departmen
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1999-2000 and an increase o
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has been significant deceleration i
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and SDR) reached a record level <st
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contribution of in
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cent in June, 2003. Lending rates h
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money as of that d
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from late 2003, posed considerable
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under pressure to reach 7.71 per ce
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Inflation, with its roots in supply
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The increasing trend in gross domes
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The average growth of</stro
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and 9.7 per cent in 2007-08 and 200
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facilitating monetary</stro
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world, for the better part
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went up from around 8 per cent to 1
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This is only a brief report <strong
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CHAPTER - V MONEY MARKET INSTRUMENT
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During 1961-85, the interest rates
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Table: V.1 Lending Rate during the
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ii) In the context of</stro
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iv) The Reserve Bank advised that t
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2004-05 2005-06 There was no releva
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1992-93 i) Deposit interest rates w
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domestic term deposit with a maturi
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(B) deposits. This would apply in r
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paying the depositors at the contra
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ii) Entities other than authorized
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iii) The interest rate ceiling on F
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Facility) served as a transitional
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were provided CLF and ACLF for the
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2. In the case of
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5.4. CALL MONEY MARKET The call mon
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1998-99 i) To develop an efficient
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Bank, an increased access over the
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ii) With effect from the fortnight
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5.5. CERTIFICATE OF DEPOSITS (CDS)
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ii) With a view to provide flexibil
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tend to raise amidst ample liquidit
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iii) In November 1996, the extent <
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as reflected in the close co-moveme
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iii) Effective from November 2, 199
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over the monthly average level <str
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1996-97 PSCFC scheme was terminated
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1999-2000 i) The general refinance
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1992-93 Some of th
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ii) As a measure to boost exports,
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2003-2004 i) The interest rate ceil
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1993-94 i) To provide flexibility t
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2000-01 i) In order to impart great
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viii) A fully functional RTGS syste
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led to improvement in liquidity man
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market and more or less stable inte
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CHAPTER -VI MONETARY POLICY IN INDI
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last resort‘, the central bank he
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November 1951 and increases in the
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the Bank Rate by 1 percentage point
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well as prime Lending Rate. Thus, a
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However, the method of</str
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the 14 th day of t
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1998 - 99 The CRR to be maintained,
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With a view to provide further flex
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2004-05 i) Cash reserve ratio (CRR)
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v) The CRR was proposed (October 6,
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Table VI.2(Contd.) Year Effective s
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percentage of thei
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September 1990. In view of<
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2004-07 2007-08 correspondent banks
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The Section 24 of
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3) To stabilize the securities mark
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Table: VI.4 Reforms in the Governme
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Table: VI.4. (Contd.) Reforms in th
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• Negotiated Dealing System (NDS)
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debt manager the RBI is merely sell
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anks and PDs, these policy<
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automatically invested and can rema
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1992-93 During the year, an active
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1999-2000 i) The Reserve Bank annou
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ii) It was decided that the facilit
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ii) The repo rate under the LAF was
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Year Effective since Table VI.5 Mov
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During the year 1992-93, an active
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Reserve Bank announced liquidity su
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2007-08 i) Withdrawal of</s
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Year Effective Date Table VI.6 (Con
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money against securities. Banks do
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According to Chandler, ―in many c
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(3) Though the banks ensure that lo
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term interest rate as their <strong
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the Central Government. The supply
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Chart VI.3. Annual Percentage Varia
- Page 361 and 362:
Annual Variation (%) Chart VI.4. An
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Table: VI.9 Money Multiplier during
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Over a period of t
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1977, the RBI has adopted four alte
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(4) M3 Time deposits or fixed depos
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Year Table VI.10 Net Bank Credit to
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Table: VI.11 Total Bank Credit to C
- Page 375 and 376:
Table: VI.12 Net Foreign Exchange A
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liabilities to the public had only
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Reserve money and Narrow Money exhi
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supply in India, in almost all the
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Output can be measured both in nomi
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een facing a loss of</stron
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decade of reform,
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India has still a balance between o
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Let us suppose that velocity is con
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Table VI.21 provides the annual rat
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India‘s inflation can also be mea
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taking both the absolute value and
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of other factors s
- Page 401 and 402:
6.2.7. MONETARY POLICY AND ECONOMIC
- Page 403 and 404:
Table: VI.27 Credit- Deposit Ratio
- Page 405 and 406:
with other advanced and emerging ma
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during 1996, 1998 and 2000-02 were
- Page 409 and 410:
Table: VI.31 Net Domestic Capital F
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was at the highest in 1991-92, with
- Page 413 and 414:
December 2002, employment growth in
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arising from the slowdown in growth
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to the system by the end of
- Page 419 and 420:
17. Reserve Bank of</strong
- Page 421 and 422:
CHAPTER-VII SUMMARY, FINDINGS, CONC
- Page 423 and 424:
6. It is objective and in discrimin
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Most central banks have, therefore,
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Monetarists believe that the econom
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targets is not enough. Such achieve
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3. In India, the opening up <strong
- Page 433 and 434:
18. Given the random nature <strong
- Page 435 and 436:
BIBLIOGRAPHY
- Page 437 and 438:
Chowdhry, Vikram. 2002. Monetary Po
- Page 439 and 440:
Keynes, J.M. 1923. A Tract on Monet
- Page 441 and 442:
Van Caspel, Venita. 1988. Money Dyn
- Page 443 and 444:
EPW Research Foundation, 2000. ‗S
- Page 445 and 446:
Kannan, R., Indranil Sen Gupta and
- Page 447 and 448:
Prasanth, V.P. and Shetty, S.A. 200
- Page 449 and 450:
Smets, F. 1995. ‗Central Bank Mac
- Page 451 and 452:
Kannan, R. ‗The Dimensions <stron