RBI paper measures threshold of sustainable current account deficit in India

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A working paper published by the Reserve Bank of India on August 8 suggests changes in the Indian economy over the past two decades have led to a higher sustainable level of the current account deficit.

The author, Rajan Goyal, says a spike in the current account deficit in 1991 caused a balance of payments crisis in India and nearly led to a government default. Based on data for 25 crises in nine emerging economies over the period 1970–2010, the paper identifies the main factors affecting

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