Purpose: The purpose of this paper is to estimate the relationship between the current account (CA) and fiscal deficit (FD), and the real exchange rate for India, for the managed float period 1996 Q2 to 2015 Q4, after controlling for output growth and oil shocks. It also examines the...

In this paper, we estimate a structural shock (inflation shock) that explains maximum forecast error variance of inflation using a structural vector auto regression (SVAR) framework. Our identification is agnostic and not based on sign and zero restrictions commonly used in SVAR literature....