In this paper, the author analyzes 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...

The paper reviews the experience of select countries - both advanced and emerging markets - in regard to capital account liberalisation (CAL). The advanced countries' experience with regard to CAL is analysed with special focus on the sequencing of CAL. The move towards CAL by many of the...

India has an elaborate system of capital controls which impede cap- ital mobility and particularly short-term debt. Yet, when the global money market fell into turmoil after the bankruptcy of Lehman Broth- ers on 13/14 September 2008, the Indian money market immediately experienced considerable...

Though there has been much general debate recently about the pros and cons of capital controls, there remains substantial confusion and uncertainty about what exactly is entailed by the term ‘restraining global capital flows’. Popular discussion around this has typically been long...

This paper analyzes the effects of capital controls and crises on financial integration, using stocks from emerging economies that trade in both domestic and international markets. The cross market premium provides a valuable measure of how capital controls and crises affect international...

When analyzing the appropriate response for monetary policy during a currency crisis it is important to keep in mind two distinct channels: (a) the impact of raising interest rates on exchange rates; and (b) the direct impact of exchange rate changes on output. The first pertains to the monetary...

The sovereign debt problems in the peripheral economies of the euro zone has started to pose a serious threat to the main economies of the Europe and perhaps to the future of the 'euro‘ itself. Such a situation is a far cry from the optimism and grand vision that marked its launch. This...

One of the methods of measuring the effectiveness of monetary policies is via inspection of monetary neutrality in the economy. It is a concept from classical economics and it suggests that changes in nominal variables do not have any impact on real variables. This paper studies the presence or...

Traditional explanations for trade misinvoicing -- high custom duties and weak domestic economies — are less persuasive in a world of high growth emerging markets who have low trade barriers. A 35- country data set over a 26 year span, covering both industrialised and developing...

The repo rate has been kept unchanged at 4.75%. The reverse repo rate left steady at 3.25%. The bank rate has been retained unchanged at 6.0%. The cash reserve ratio (CRR) of scheduled banks has been retained unchanged at 5% of their net demand and time liabilities (NDTL). Statutory liquidity...