Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/64045 
Full metadata record
DC FieldValueLanguage
dc.contributor.authorHutchison, Michael M.en
dc.contributor.authorSengupta, Rajeswarien
dc.contributor.authorSingh, Nirvikaren
dc.date.accessioned2010-11-16-
dc.date.accessioned2012-09-21T11:54:06Z-
dc.date.available2012-09-21T11:54:06Z-
dc.date.issued2010-
dc.identifier.urihttp://hdl.handle.net/10419/64045-
dc.description.abstractA key challenge for macroeconomic policy in open economies is how to simultaneously manage exchange rates, interest rates and capital account openness - the trilemma. This paper calculates a trilemma index for India and investigates its evolution over time. We find that financial integration has increased markedly after the mid-2000s, with corresponding limitations on monetary independence and exchange rate stability. This tradeoff has been mitigated, however, with the rise of international reserves as a partially independent instrument of macroeconomic policy. In addition, we confirm that the weighted sum of the three indexes adds up to a constant, validating the notion that a rise in one trilemma variable should be traded-off with a drop of the weighted sum of the other two. Finally, we consider the implications of changes in the trilemma index for macroeconomic outcomes. We find some evidence that greater financial integration and corresponding loss of monetary autonomy and exchange rate stability has influenced inflation and inflation volatility, though not in a consistent manner.en
dc.language.isoengen
dc.publisher|aUniversity of California, Santa Cruz Institute for International Economics (SCIIE) |cSanta Cruz, CAen
dc.relation.ispartofseries|aWorking Paper |x10-09en
dc.subject.jelE4en
dc.subject.jelE5en
dc.subject.jelF3en
dc.subject.jelF4en
dc.subject.ddc330en
dc.subject.keywordFinancial trilemmaen
dc.subject.keywordIndian economyen
dc.subject.keywordInternational reservesen
dc.subject.keywordForeign exchange interventionen
dc.subject.keywordMonetary policyen
dc.subject.keywordCapital account opening.en
dc.titleIndia's trilemma: Financial liberalization, exchange rates and monetary policy-
dc.typeWorking Paperen
dc.identifier.ppn639616372en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

Files in This Item:
File
Size
579.71 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.