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Managing Finance in Emerging Economies: The Case of India

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  • Sunanda Sen

Abstract

India has been experiencing rising inflows of overseas capital since the deregulation of its financial sector. Often looked upon as a success story among other emerging economies, the country has been subject to pitfalls and trilemmas that deserve attention. It has been officially recognized by the Governors of RBI that the financial crisis in India reflects the “dirty face” of what is described in the literature as the impossible trinity, along with the volatility in the markets that was caused by speculative capital in search of profits. However, Joseph Stiglitz observed that India’s policymakers, “particularly the Reserve Bank of India, are already doing a great job. I wish the U.S. Federal Reserve displayed the same understanding of the role of regulation that the RBI has done, at least so far.” Recently, the United States made a path-breaking move with the launching of the recent bill on the regulation of Wall Street, which was passed by a majority of the Senate on May 20, 2010. We urge the implementation of similar laws in India and other emerging economies, especially in view of the fact that the recent moves for financial deregulation in these countries have, rather, been in the opposite direction.

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  • Sunanda Sen, 2010. "Managing Finance in Emerging Economies: The Case of India," Economics Working Paper Archive wp_630, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_630
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    References listed on IDEAS

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    1. Robles, Miguel & Torero, Maximo & von Braun, Joachim, 2009. "When speculation matters:," Issue briefs 57, International Food Policy Research Institute (IFPRI).
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    Cited by:

    1. Amiya Kumar Bagchi, 2015. "The Arithmetic of Resource-intensive Growth, Keynesian Monetary Management, and Egalitarian Green Growth," Development and Change, International Institute of Social Studies, vol. 46(5), pages 1201-1212, September.
    2. Byasdeb Dasgupta, 2013. "Some Aspects of External Dimensions of Indian Economy in the Age of Globalisation," Working Papers halshs-00820294, HAL.

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    More about this item

    Keywords

    Money Market; Speculation; Derivatives; Financial Liberalization; Futures Markets;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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