This paper empirically examines the properties of a new weighted monetary aggregate, Currency equivalent monetary aggregate (CEMA) for India using the components of a broad monetary aggregate NM3 recommended by the working group on Money Supply, Analytics and Methodology of Compilation, Reserve Bank of India (RBI, 1998). The empirical properties of this aggregate via a money demand function are compared with its simple sum counterpart NM3. The results suggest the superiority of the CEMA over NM3. © 2007 Dietrich Schönwitz.

Arun Kumar G

Department of Management Studies

Acharya D.

IIT Madras is a public technical and research university located in Chennai, Tamil Nadu. Founded in 1959, it is recognised as an Institute of National Importance.

IIT Madras has been ranked as the top engineering institute in India for four years in a row by the National Institutional Ranking Framework of the MHRD

It currently offers undergraduate, postgraduate and research degrees across 16 disciplines in Engineering, Sciences, Humanities and Management. About 596 faculty belonging to science and engineering departments and centres of the Institute are engaged in teaching, research and industrial consultancy.

Journal	Banks and Bank Systems
Publisher	LLC CPC Business Perspectives
ISSN	18167403
Open Access	Yes