Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/176275
Authors: 
Kohli, R.
Year of Publication: 
2011
Series/Report no.: 
Working Paper 257
Abstract: 
Managing capital flows is the key policy challenge for emerging economies like India in the aftermath of the crisis. In contrast to other emerging markets who are levying capital controls, India's macro-monetary framework is distinguished by significant restrictions that help manage inflows. Against this context, the paper characterizes India's capital account management strategy through illustrating the 2006-07 episodes of capital inflows in the buildup to the global financial crisis. It shows how these restrictions allowed the authorities to straddle the open-economy trilemma and balance the exchange rate and price stability objectives. It offers relevant evidence on the effectiveness of India's capital controls in retaining monetary autonomy.
Subjects: 
Capital flows
Capital account liberalization
monetary independence
India
trilemma.
JEL: 
E5
E58
F3
F36
G15
G18
O16
Document Type: 
Working Paper

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