TY  - JOUR
AU  - Prasad,Eswar S.
TI  - Some New Perspectives on India's Approach to Capital Account Liberalization
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14658
PY  - 2009
Y2  - January 2009
UR  - http://www.nber.org/papers/w14658
L1  - http://www.nber.org/papers/w14658.pdf
N1  - Author contact info:
Eswar S. Prasad
Dyson School of Applied Economics and
Management
Cornell University
440 Warren Hall
Ithaca, NY 14853
Tel: 607/255-5687
Fax: 607/255-9984
E-Mail: eswar.prasad@cornell.edu
AB  - 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.
ER  -