TESTING THE LONG-RUN NEUTRALITY OF MONEY IN A DEVELOPING-ECONOMY - THE CASE OF INDIA

Seasonal integration and cointegration techniques are used to test the hypothesis of long-run money neutrality using Indian data. On the bas is of money, real output and price level quarterly data, empirical evi dence is presented showing that money is cointegrated with prices but not with output at the zero frequency. This evidence is interpreted to imply that money affects nominal but not real variables in the long r un. It is concluded that money is neutral in the long run. (C) 1997 El sevier Science B.V.