Money supply drives food prices in India, impacting long-term inflation.
The study looked at how the amount of money in circulation affects food prices in India. They found that a specific type of money supply (M1) influences food prices, while another type (M3) does not. This means that the amount of money in the economy can impact food prices in the long term. Additionally, an increase in the broader measure of money supply (M3) leads to higher food prices for the next three years.