India’s Experience in Navigating the Trilemma : Do Capital Controls Help?
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 characterizes India‘s capital account management strategy through illustrating the 2006-07 episodes 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.Download Info
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Paper provided by East Asian Bureau of Economic Research in its series Governance Working Papers with number 23184.Length:
Date of creation: Feb 2012
Date of revision:
Handle: RePEc:eab:govern:23184
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Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
Web page: http://www.eaber.org
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Related research
Keywords: currency; Controls; India; Capital; monetary policy;Other versions of this item:
- R. Kohli, 2012. "India’s Experience in Navigating the Trilemma : Do Capital Controls Help?," Finance Working Papers 23184, East Asian Bureau of Economic Research.
- R. Kohli, 2012. "India’s Experience in Navigating the Trilemma : Do Capital Controls Help?," EABER Working Papers 23184, East Asian Bureau of Economic Research.
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Aizenman, Joshua & Sengupta, Rajeswari, 2012.
"The Financial Trilemma in China and a Comparative Analysis with India,"
Santa Cruz Department of Economics, Working Paper Series
qt2xn3238g, Department of Economics, UC Santa Cruz.
- Aizenman, Joshua & Sengupta, Rajeswari, 2011. "The financial trilemma in China and a comparative analysis with India," MPRA Paper 34485, University Library of Munich, Germany.
- Aizenman, Joshua & Sengupta, Rajeswari, 2011. "The financial trilemma in China and a comparative analysis with India," MPRA Paper 39798, University Library of Munich, Germany, revised 03 Jul 2012.
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