Is Indias Current Account Deficit Problem Truly Global?

Abstract

This research paper examines India's current account deficit problem in the context of dom estic macro imbalances and the exogenous global dynamics. At the outset, the paper reviews historically various theoretical models explaining multifarious economic determinants of current account deficits. To be more specific in the Indian context, this problem is dealt with by running sim ple regressions explaining the correlation and possible causality between the current account deficit on the one hand and growth rates, real effective exchange rates, exports and imports, gold imports, export and import elasticities, import intensities and net foreign assets on the other.