1. – Assist. Prof.,department Of Economics, Panjab Univ.,chandigarh
| Received
15-May-2019 |
Accepted
- |
Published
15-May-2019 |
Abstract
This study is an attempt to test the
validity of trinity hypothesis and
to measure the cost of capital
account convertibility which Indian
economy has paid in the
form of one of the cornerns of
trinity triangle. The monthly data
obtained from various publications
of RBI and IMF over the
period 1980:M1 to 2016:M12
have been utilized to construct
three trinity indices of Monetary
Independence (MI), Exchange
Rate Stability (ERS), and Capital
Account Openness (CO).Using
the graphical and cointegration
tools, the existence of trinity hypothesis
has been confirmed in
Indian context. It has been noticed
that India has clearly chosen
capital openness (CO) over
exchange rate stability (ERS).
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