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An Empirical Analysis Of The Relationship Between Capital Flows And The Real Exchange Rate In India, Shashank Goel
An Empirical Analysis Of The Relationship Between Capital Flows And The Real Exchange Rate In India, Shashank Goel
International Journal of Applied Management and Technology
This paper analyzes the relationship between the net capital flows (NCFs) and other fundamentals and the real exchange rate (RER) in India consequent to the liberalization of the capital account in 1990s for the period 1996–1997 to 2012–2013 using the Autoregressive Distributed Lag approach to cointegration. Most studies in the literature emphasize the role of a number of real and monetary variables and domestic policies in determination of RER. But there is no consensus on what actually determines the RER. The estimation includes NCFs, government consumption expenditure, terms of trade, trade openness, Gross Domestic Product growth rate, change in foreign …