Some New Perspectives on India's Approach to Capital Account Liberalization

Prasad, Eswar

doi:10.3386/w14658

Cited by 9 publications

(6 citation statements)

References 46 publications

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“…It is possible that without the controls the surge may have been bigger. However, it may also be true that the controls were known and understood by economic agents who had learnt how to navigate them (Prasad, 2009). …”

Section: Magnitude Of Flowsmentioning

confidence: 99%

Did the Indian Capital Controls Work as a Tool of Macroeconomic Policy?

Patnaik¹,

Shah²

2012

IMF Econ Rev

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The present debate on capital controls emphasises their potential role as tools for macroeconomic and financial stability. The effectiveness of these tools may depend on whether a country has the legal and administrative machinery to implement capital controls. We contribute to the analysis of the costs and benefits of capital controls by studying the experience of India, a country that has a system of capital controls that had never been dismantled. We find that when used as tools of macroeconomic policy, during a capital surge, the Indian experience appears to be similar to that of other countries.JEL Codes: F32, F33

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Section: Magnitude Of Flowsmentioning

confidence: 99%

Did the Indian Capital Controls Work as a Tool of Macroeconomic Policy?

Patnaik¹,

Shah²

2012

IMF Econ Rev

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“…This will worsen the balance of payments, and reduce a country's international reserves. The Interest Rate variable along with the Currency Exchange Value variable is the forming variable of money demand in the context of Purchasing Power Parity [5][6][7][8]. If there is an increase in the money supply, then the core money or monetary base will also increase.…”

Section: B Discussion Based On Selected Modelmentioning

confidence: 99%

“…Dynamics Approach and with The Monetary Approach [3][4][5][6][7]. The results of those studies were various.…”

Section: The Research On International Reserves With Constrained Growmentioning

confidence: 99%

“…There are several theories that become the basis for analyzing changes in the value of a country's foreign exchange reserves [1]. These theories can be grouped into [2][3][4][5][6][7][8][9][10]: 1) Pre-Classic BOP Theory, 2) Classical BOP Theory, 3) Keynesian BOP Theory, 4) Neo-Classical or Monetary BOP Theory and 5) The Balance of Payments Constrained Growth Model. The differences in each of these theories are seen from the aspects of assumptions, variables and propositions.…”

Section: Introductionmentioning

confidence: 99%

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Study of Perspective and Prospective Aspects on Indonesia Balance of Payment in 1980-2017

Masdjojo¹,

Rifai²,

Isnowati³

et al. 2019

Proceedings of the International Conference on Banking, Accounting, Management, and Economics (ICOBAME 2018)

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This study aims to analyze the influence of Interest Rate, Economic Growth, Domestic Credit and Foreign Exchange against Foreign Reserves. The analysis is based on Monetary Approach to the Balance of Payment (MABP) theory. The object of research is the value of Indonesia Foreign Exchange Reserve. This study uses quarterly time series data from 1980 to 2017. Data analysis methods used are Auto Regressive Conditional Heteroscedasticity (ARCH) with GARCH (1.1), ARCH in mean (ARCH-M), Threshold ARCH (TARCH) and GARCH (1,1) with the Variant Regressor. The selection of the best model is based on the level of significance, the value of Akaike Info Criterion (AIC) and Schwarz Criterion. The selected model is the TARCH estimation method. Based on the TARCH output, it can be concluded that all independent variables have significant effect on the Foreign Exchange Reserve, except Domestic Credit. The direction of the relationship of each variable is consistent with the theory of Monetary Approach to the Balance of Payment (MABP).

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“…It is becoming increasingly more sensible for developing countries to shift their focus to how they will manage the process of financial liberalization rather than whether they should liberalize at all (see Prasad, 2008, for a discussion in the context of India). There are at least a couple of compelling reasons for this: First, capital accounts will become more open so long as there are strong incentives for cross-border flows of capital.…”

Section: Discussionmentioning

confidence: 99%

Financial Globalization and Economic Policies

et al. 2009

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S ABSTRACT Financial Globalization and Economic Policies *We review the large literature on various economic policies that could help developing economies effectively manage the process of financial globalization. Our central findings indicate that policies promoting financial sector development, institutional quality and trade openness appear to help developing countries derive the benefits of globalization. Similarly, sound macroeconomic policies are an important prerequisite for ensuring that financial integration is beneficial. However, our analysis also suggests that the relationship between financial integration and economic policies is a complex one and that there are unavoidable tensions inherent in evaluating the risks and benefits associated with financial globalization. In light of these tensions, structural and macroeconomic policies often need to be tailored to take into account country specific circumstances to improve the risk-benefit tradeoffs of financial integration. Ultimately, it is essential to see financial integration not just as an isolated policy goal but as part of a broader package of reforms and supportive macroeconomic policies.JEL Classification: F02, F21, F36, F4

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Some New Perspectives on India's Approach to Capital Account Liberalization

Cited by 9 publications

References 46 publications

Did the Indian Capital Controls Work as a Tool of Macroeconomic Policy?

Did the Indian Capital Controls Work as a Tool of Macroeconomic Policy?

Study of Perspective and Prospective Aspects on Indonesia Balance of Payment in 1980-2017

Financial Globalization and Economic Policies

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