Abstract

The stability of the money demand function has long been a central concern in macroeconomic theory and policy formulation particularly in economies undergoing rapid financial transformation. In India the increasing pace of financial innovation—characterized by digital payments electronic banking fintech expansion mobile wallets algorithmic credit systems and diversified financial instruments—has raised critical questions about the traditional understanding of money demand behavior. Historically the money demand function has been used to guide monetary policy forecast liquidity needs regulate inflation and understand the relationship between income interest rates and monetary aggregates. However with the rise of new payment technologies and alternative stores of value the conventional determinants of money demand are increasingly subject to disruption. This research paper explores the evolving nature of India’s money demand function focusing on its stability in an environment shaped by