Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/35578 
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers No. 3927
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
In this paper, I analyze 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 terms of reducing its vulnerability to crises. By now, the capital account has become quite open and reversing this is not a viable option. Moreover, the remaining capital controls are rapidly becoming ineffective, making the debate about capital controls rather moot. Managing de facto financial integration into international capital markets and aligning domestic macroeconomic policies in a manner that maximizes the indirect benefits and reduces the risks is the key challenge now facing India's policymakers on this front.
Subjects: 
India
international financial integration
capital flows
capital controls
JEL: 
F3
F4
O2
Document Type: 
Working Paper

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