EconPapers    
Economics at your fingertips  
 

Why India choked when Lehman broke

Ila Patnaik () and Ajay Shah ()
Additional contact information
Ila Patnaik: National Institute of Public Finance and Policy

Working Papers from National Institute of Public Finance and Policy

Abstract: India has an elaborate system of capital controls which impede capital mobility and particularly short-term debt. Yet, when the global money market fell into turmoil after the bankruptcy of Lehman Brothers on 13/14 September 2008, the Indian money market immediately experienced considerable stress, and the operating procedures of monetary policy broke down. We suggest that Indian multinationals were using the global money market and were short of dollars on 15 September. They borrowed in India and took capital out of the country. We make three predictions that follow from this hypothesis, and nd that the evidence matches these predictions. This suggests an important role for Indian multinationals in India's evolution towards de facto convertibility.

New Economics Papers: this item is included in nep-cwa and nep-ifn
Date: 2010-01
Note: Working Paper 63, 2010
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://www.nipfp.org.in/working_paper/wp_2010_63.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 401 Unauthorized

Related works:
Journal Article: Why India Choked when Lehman Broke (2010) Downloads
Working Paper: Why India choked when Lehman broke (2010) Downloads
Working Paper: Why India Choked when Lehman Broke (2010) 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:npf:wpaper:10/63

Access Statistics for this paper

More papers in Working Papers from National Institute of Public Finance and Policy
Bibliographic data for series maintained by S.Siva Chidambaram ().

 
Page updated 2019-01-11
Handle: RePEc:npf:wpaper:10/63