From ‘taper’ to ‘shutdown’

.......The lesson is simple: we must keep our own house in order. The global economic environment will continue to be uncertain, irrespective of whether or not there is a Fed tapering or a federal default. The countries most vulnerable to capital outflows in such situations are the ones with macroeconomic imbalances on their external and fiscal fronts. While the Government and the Reserve Bank of India have taken some steps in bringing down the current account deficit to more manageable levels, these clearly aren’t enough........

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