This paper studies the flow of funds and portfolio behaviour of Indian banks from 1951 to 1994. In this period, financial controls such as variable reserve ratios were important constraints on bank behaviour, especially before liberalization took place in the early 1990s. We estimate a system of...

We estimate a flow of funds model for the household sector in India, within the Almost Ideal Demand System (AIDS) framework, and examine the demand for money and the substitution effects between money and other financial assets. The restricted long-run model, obtained using cointegration...