N. Arora, A. OsatiEraghi APPLIED ECONOMETRICS / ПРИКЛАДНАЯ ЭКОНОМЕТРИКА Прикладная эконометрика, 2016, т. 44, с. 25–37. <...> N. Arora, A. OsatiEraghi1 Does India have a stable demand for money function after reforms? <...> A macroeconometric analysis The present study analyzes the stability of the demand for money function in India over the period 1991:M4–2014:M9 using co-integration and Vector Error Correction Mechanism (VECM ) framework. <...> From analysis, it has been observed that there exists a stable demand for money function in India during the post-reforms period, i. e. a long-run relationship does exist between demand for real balances, national output (Yt exchange rate (ERt ), rate of interest (Rt ). <...> Two variables Yt and ERt for real balances positively, while the observed effect of M2 magnitudes of all three regressors have been observed according to a-priori information without any paradoxical situation. <...> Introduction facilitates to evaluate the subjects related to the effectiveness of monetary policy; an issue vital for achieving stable economic growth. <...> An effective and transparent monetary policy requires a strong relation between macroeconomic variables and output, income, interest rate, prices, etc. <...> When it is observed that the demand for money is a stable function, an exact and suitable impact of change in money supply on the other macroeconomic variables such as prices and outputs becomes predictable. <...> In such a case, the money supply will be a reliable way of attaining a constant inflation rate. <...> In simple, if the demand for money is ascertained well before in time then the central bank may pump the same amount of money supply in economy to attain stable price level. <...> Macroeconomics Макроэкономика 25 he main purpose of theoretical and empirical studies on estimation of demand for money function is to find a stable money demand function because stability is one of the preconditions of effectiveness of monetary policy in each economy. <...> Thus, the signs and 2016, 44 2016, 44 Thus, given the various advantages of estimating the demand for money function, a number of ПРИКЛАДНАЯ ЭКОНОМЕТРИКА / APPLIED ECONOMETRICS studies have been carried out around the world to analyze the stability of money demand function. <...> Hamori and Hamori (1999) analyzed a stable relationship between money <...>