Economic Research Institute Study paper
Utah State University
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When the issue of the effect of monetary changes on an economy is addresses it is essential to initially establish the direction of casual flow in economic relationships. In particular, it is important to establish whether changes in the money stock causally affect other economic variables, such as nominal output and/or prices or whether no such relationships can empirically be found to exist. Essentially the all important theoretical question is which variables, if any, do monetary changes affect.
Saunders, Peter J. and Biswas, Basudeb, "Causality Between Money and Price Level in India: Further Empirical Evidence" (1987). Economic Research Institute Study Papers. Paper 458.