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Linkages of Indian Interest Rates with US and Japanese Rates

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  • Vuyyuri, S.
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    Abstract

    The reform process in India has gradually integrated the Indian financial markets with the rest of the world, and as a corollary, interest rates in India have been responding to movements in other financial markets. This article employs monthly short-term interest rate data over the 1992-2002 period to investigate the influence that the Japanese and the American interests exert on interest rates in India. We use cointegration and causality tests and find the existence of a steady-state relationship of short-term interest rates in India with both US and Japan. We also briefly discuss some policy fallouts.

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    Bibliographic Info

    Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

    Volume (Year): 4 (2004)
    Issue (Month): 2 ()
    Pages:

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    Handle: RePEc:eaa:aeinde:v:4:y:2004:i:1_10

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