Capital Flows, Financial Asset Prices and Real Financial Market Exchange Rate: A Case Study for an Emerging Market, India
AbstractIn this paper we empirically investigate the relationship between capital flows and exchange rates in India based on a new index of real effective exchange rates for the Indian Rupee. Instead of using consumer price indices we deflate exchange rates by MSCI asset price indices. The cointegration analysis indicates a long-run equilibrium relationship between real financial market exchange rate and the net outstanding equity investment in India. In the short run capital inflows are accompanied by an appreciation of real financial exchange rate of the Rupee
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Bibliographic InfoArticle provided by Lifescience Global in its journal Journal of Reviews on Global Economics.
Volume (Year): 2 (2013)
Issue (Month): ()
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Short-term Capital Movements; Foreign Exchange; International Financial Markets; India;
Other versions of this item:
- Saurabh Ghosh & Stefan Reitz, 2012. "Capital Flows, Financial Asset Prices and Real Financial Market Exchange - Rate: A Case Study for an Emerging Market, India," Kiel Advanced Studies Working Papers 461, Kiel Institute for the World Economy.
- F31 - International Economics - - International Finance - - - Foreign Exchange
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
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