Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/62345
Authors: 
Ghosh, Saurabh
Reitz, Stefan
Year of Publication: 
2012
Series/Report no.: 
Kiel advanced studies Working Papers 461
Abstract: 
In this paper we empirically investigate the relationship between capital flows and exchange rates in India based on a new index of real effective exchange rates for the Indian Rupiah. Instead of using consumer price indices we deflate exchange rates by MSCI asset price indices. The cointegration analysis indicates a long-run equilibrium relationship between our real financial market exchange rate and the net outstanding equity investment in India. In the short run capital inflows are accompanied by an appreciation of real financial exchange rate of the Rupiah.
Subjects: 
Real Exchange Rate
Capital Flows
Financial Asset Prices
Emerging Financial Markets
India
JEL: 
F31
G15
E58
Document Type: 
Working Paper

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