India's Approach to Capital Account Liberalization
AbstractIn this paper, I analyze India's approach to capital account liberalization through the lens of the new literature on financial globalization. India's authorities have taken a cautious and calibrated path to capital account opening, which has served the economy well in terms of reducing its vulnerability to crises. By now, the capital account has become quite open and reversing this is not a viable option. Moreover, the remaining capital controls are rapidly becoming ineffective, making the debate about capital controls rather moot. Managing de facto financial integration into international capital markets and aligning domestic macroeconomic policies in a manner that maximizes the indirect benefits and reduces the risks is the key challenge now facing India's policymakers on this front.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3927.
Length: 54 pages
Date of creation: Jan 2009
Date of revision:
Publication status: published in: Brookings India Policy Forum, August 2009
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Find related papers by JEL classification:
- F3 - International Economics - - International Finance
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
- O2 - Economic Development, Technological Change, and Growth - - Development Planning and Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-24 (All new papers)
- NEP-CWA-2009-01-24 (Central & Western Asia)
- NEP-DEV-2009-01-24 (Development)
- NEP-OPM-2009-01-24 (Open Economy Macroeconomic)
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- Patnaik, Ila & Shah, Ajay, 2010.
"Why India choked when Lehman broke,"
10/63, National Institute of Public Finance and Policy.
- Dilip K. Das, 2010. "Financial globalization: a macroeconomic angle," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 2(4), pages 307-325, December.
- Ila Patnaik & Ajay Shah, 2012. "Did the Indian Capital Controls Work as a Tool of Macroeconomic Policy?," IMF Economic Review, Palgrave Macmillan, vol. 60(3), pages 439-464, September.
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