External Pub

Capital flows to emerging markets are generally volatile, resulting in periodic "sudden stop” episodes – when capital inflows dry up abruptly, with significant negative effects on the economy and on financial variables. This paper reviews India’s experience with capital flows. The relative volatility of different kinds of capital flows in India is similar to that...   Read More

The pandemic has afflicted India at a time when its economy had already been decelerating. Defying a long-term accelerating path, real GDP growth moderated from 7.0 percent in 2017-18 to 6.1 percent in 2018-19 and 4.2 percent in 2019-20. The pre-COVID-19 growth deceleration was perceived to be due to long-standing structural rigidities in key input...   Read More

India has attained much economic success in the last three decades. Yet economic deceleration in the recent years has generated worried commentaries about India’s growth outlook. In this paper, we offer a long-term macro perspective on India’s growth experience. Analyzing past five decades of data, we note that growth has slowly but steadily accelerated over...   Read More

This paper analyzes the use of capital flow measures in emerging markets. Drawing on a specially compiled new database of capital flow measures, it establishes that policy makers in emerging market economies do not use capital flow measures as an active tool at business cycle frequency. While there is a general trend toward the liberalization...   Read More

The recent reversal of capital flows to emerging markets has pointed up the continuing relevance of the sudden stop problem. This paper analyzes the sudden stops in capital flows to emerging markets since 1991. It shows that the frequency and duration of sudden stops have remained largely unchanged, but that the relative importance of different...   Read More

Despite repeated attempts, South Asian countries have managed only limited and sporadic success in mobilizing larger tax revenue. Tax-to-GDP ratios in most countries in the region remain below cross country averages and are considered inadequate to meet their financing needs. Underperformance in tax revenue generation does not seem due to paucity of tax policy reforms....   Read More

India was among the hardest hit by the Fed’s ‘taper talks’. This column argues that this impact was large for two reasons. First, India received huge capital flows before. This had made it a convenient target for investors seeking to rebalance away from emerging markets. Second, macroeconomic conditions had worsened, which rendered the economy vulnerable....   Read More

The "tapering talk" starting on May 22, 2013, when Federal Reserve Chairman Ben Bernanke first spoke of the possibility of the U.S. central bank reducing its security purchases, had a sharp negative impact on emerging markets. India was among those hardest hit. The rupee depreciated by 18 percent at one point, causing concerns that the...   Read More

In May 2013, Federal Reserve officials first began to talk of the possibility of tapering their security purchases. This tapering talk had a sharp negative impact on emerging markets. Different countries, however, were affected very differently. This paper uses data on exchange rates, foreign reserves and equity prices between April and August 2013 to analyze...   Read More

The Indian banking system was initially thought to be insulated from the global financial crisis owing to heavy public ownership and cautious management. It was thus a surprise when some banks experienced deposit flight, as depositors shifted their money toward government-owned banks and specifically toward the State Bank of India, the largest public bank. While...   Read More