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MANAGING CAPITAL FLOWS IN INTERMEDIATE REGIMES: THE CASE OF INDIA

MANAGING CAPITAL FLOWS IN INTERMEDIATE REGIMES: THE CASE OF INDIA Managing capital flows is the key policy challenge for emerging economies like India in the aftermath of the crisis. In contrast to other emerging markets who are levying capital controls, India's macro-monetary framework is distinguished by significant restrictions that help manage inflows. Against this context, the paper characterises India's capital account management strategy through illustrating the 2006–2007 episode of capital inflows in the buildup to the global financial crisis. It shows how these restrictions allowed the authorities to straddle the open-economy trilemma and balance the exchange rate and price stability objectives. It offers relevant evidence on the effectiveness of India's capital controls in retaining monetary autonomy. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of International Commerce, Economics and Policy World Scientific Publishing Company

MANAGING CAPITAL FLOWS IN INTERMEDIATE REGIMES: THE CASE OF INDIA

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Publisher
World Scientific Publishing Company
Copyright
Copyright ©
ISSN
1793-9933
eISSN
1793-9941
DOI
10.1142/S1793993311000348
Publisher site
See Article on Publisher Site

Abstract

Managing capital flows is the key policy challenge for emerging economies like India in the aftermath of the crisis. In contrast to other emerging markets who are levying capital controls, India's macro-monetary framework is distinguished by significant restrictions that help manage inflows. Against this context, the paper characterises India's capital account management strategy through illustrating the 2006–2007 episode of capital inflows in the buildup to the global financial crisis. It shows how these restrictions allowed the authorities to straddle the open-economy trilemma and balance the exchange rate and price stability objectives. It offers relevant evidence on the effectiveness of India's capital controls in retaining monetary autonomy.

Journal

Journal of International Commerce, Economics and PolicyWorld Scientific Publishing Company

Published: Dec 1, 2011

Keywords: Capital flows capital account liberalisation monetary independence India trilemma

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