Relationship of Gold and Inflation in India
Hidayatullah National law university-Raipur | Relationship of Gold and Inflation in the Indian context | Project for Semester I | | Akanksha Dikshit | 8/21/2012 |
The Project analyses the relationship of Gold prices and inflation in India. Gold holds a special place in the Indian psyche and cultural ethos. It influences the Indian economy like no other material. The study is based upon the study of existing research material. |
Acknowledgements
I thankfully acknowledge the help and contribution of my teacher Mrs……… and my seniors in pursuing this study which also happens to be my first serious endeavor in such a project work. I have tried to trace the affinity of gold for Indians and its very important role in the Indian economy. The study is based upon the existing resources on the subject and therefore understandably not conclusive.
The Distinctive Properties of Gold
Gold has been used as a store of value and form of currency since ancient times. Since the seventeenth century it has been formally traded over the counter in London and by the nineteenth century it underpinned the largest fixed exchange rate system the world has ever known (the Gold Standard). In the twentieth century it was again used as the backbone to a formal exchange rate mechanism (Bretton Woods) but the collapse of the system in the early 1970s left the price to float freely for the first time in over 250 years.
Gold’s historical popularity as a currency and a store of value has sprung in part from a number of peculiar properties not fully shared with competing assets. In contrast to other commodities, gold does not perish or degrade over time, giving it unique properties as a very long-term store of value. Gold mined today is interchangeable with gold mined many hundreds of years ago.
The supply of gold has also been relatively fixed for the last century, with annual mine production a small share of the total stock of gold outstanding and with a limited
The Project analyses the relationship of Gold prices and inflation in India. Gold holds a special place in the Indian psyche and cultural ethos. It influences the Indian economy like no other material. The study is based upon the study of existing research material. |
Acknowledgements
I thankfully acknowledge the help and contribution of my teacher Mrs……… and my seniors in pursuing this study which also happens to be my first serious endeavor in such a project work. I have tried to trace the affinity of gold for Indians and its very important role in the Indian economy. The study is based upon the existing resources on the subject and therefore understandably not conclusive.
The Distinctive Properties of Gold
Gold has been used as a store of value and form of currency since ancient times. Since the seventeenth century it has been formally traded over the counter in London and by the nineteenth century it underpinned the largest fixed exchange rate system the world has ever known (the Gold Standard). In the twentieth century it was again used as the backbone to a formal exchange rate mechanism (Bretton Woods) but the collapse of the system in the early 1970s left the price to float freely for the first time in over 250 years.
Gold’s historical popularity as a currency and a store of value has sprung in part from a number of peculiar properties not fully shared with competing assets. In contrast to other commodities, gold does not perish or degrade over time, giving it unique properties as a very long-term store of value. Gold mined today is interchangeable with gold mined many hundreds of years ago.
The supply of gold has also been relatively fixed for the last century, with annual mine production a small share of the total stock of gold outstanding and with a limited
Bibliography: 3. Chetan Ahyia: India’s Fettish for gold, The Economic Times, Dec 20, 2010 4 7. Aggarwal, R., 1992, Gold Markets, in: Newman, P., Milgate, M., Eatwell, J.(eds.) The New Palgrave Dictionary of Money and Finance (Vol 2), Basingstoke, Macmillan, pp. 257-258 8 [ 8 ]. Dr. Kannan and Sarat Dhal on a closely related topic, India 's demand for gold: some issues for economic development and macroeconomic policy, which appeared in the Indian Journal of Economics and Business, 2008 [ 9 ] [ 10 ]. Ghosh, Dipak, Levin, E. J., Macmillan, Peter and Wright, R. E. (2002), Gold as an Inflation Hedge, Department of Economics, University of St. Andrews in its series Discussion Paper Series, Department of Economics with number 0021