IMF Staff Papers

IMF Staff Papers, Volume 52, No. 2

Author/Editor:

International Monetary Fund. Research Dept.

Publication Date:

August 29, 2005

Electronic Access:

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Summary:

This paper examines contractionary currency crashes in developing countries. It explores the causes of India’s productivity surge around 1980, more than a decade before serious economic reforms were initiated. The paper finds evidence that the trigger may have been an attitudinal shift by the government in the early 1980s that, unlike the reforms of the 1990s, was pro-business rather than pro-market in character, favoring the interests of existing businesses rather than new entrants or consumers. A relatively small shift elicited a large productivity response, because India was far away from its income possibility frontier.

Series:

IMF Staff Papers, Volume 52, No. 2

Subject:

Balance of trade Bank capital Capitalization Central banks Current account Devaluation of currency Developing countries Econometric models Economic growth Financial crises Fiscal policy Fiscal transparency Inflation Inflation targeting International reserves Monetary policy Open economies Recessions Regression analysis

Notes:

Issues from 1998 onward are available for free online