EconPapers    
Economics at your fingertips  
 

What Caused the 1991 Currency Crisis in India?

Sweta Saxena and Valerie Cerra

No 00/157, IMF Working Papers from International Monetary Fund

Abstract: Did real overvaluation contribute to the 1991 currency crisis in India? This paper seeks an answer by constructing the equilibrium real exchange rate, using an error correction model and a technique developed by Gonzalo and Granger (1995). The results are affirmative and the evidence indicates that current account deficits and investor confidence also played significant roles in the sharp exchange rate depreciation. The ECM model is supported by superior out-of-sample forecast performance versus a random walk model.

Keywords: Capital controls; Devaluation; Currencies; Economic models; Exchange rates; Financial crisis; India; Currency Crisis, Equilibrium Exchange Rate, Error Correction Model, Gonzalo-Granger decomposition, exchange rate, real exchange rate, current account, current account deficits (search for similar items in EconPapers)
Pages: 27
Date: 2000-10-01
References: Add references at CitEc
Citations: View citations in EconPapers (8) Track citations by RSS feed

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=3794 (application/pdf)

Related works:
Journal Article: What Caused the 1991 Currency Crisis in India? (2002) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:00/157

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Jim Beardow () and Hassan Zaidi ( this e-mail address is bad, please contact ).

 
Page updated 2020-09-26
Handle: RePEc:imf:imfwpa:00/157