Inflows of Capital,Exchange Rates and Balance of Payments- the Post-Liberalisation Experience of India

Abstract

A review of the analytical literature shows that macroeconomic consequences of financial liberalization are the results of the combined effect of monetary, .fiscal as well as trade and exchange rate policies followed by the government of a country. The results of vector error correction estimates show that total inflows of foreign capital are causing imports and imports are causing inflows of foreign capital.