1. GLOBALIZATION AND MONETARY-POLICY INDEPENDENCE IN INDIA.
- Author
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Paul, Biru Paksha
- Subjects
- *
MONETARY policy , *AUTARCHY , *ECONOMIC globalization , *FOREIGN exchange rates , *INTEREST rates ,INDIAN economy - Abstract
Globalization of the early 1990s is thought to have caused the loss of monetary-policy independence in India. I find that Indias monetary-policy independence is anchored in the exchange-rate regime along with its state of foreign-exchange reserves, and not necessarily in globalization per se. India significantly followed US interest rates even in the absence of globalization in the 1960s when the country faced foreign-exchange constraints and maintained a fixed exchange rate. From the mid 1970s to the early 1990s, India exercised monetary-policy independence under a floating exchange-rate regime. The loss of monetary-policy independence since the early 1990s is not attributable to globalization per se, but mainly to the stable exchange-rate policy of India, which heavily resembles the policy of the 1960s. [ABSTRACT FROM AUTHOR]
- Published
- 2012
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