India must avoid capital account convertibility: Rodrik

Mayur.Shetty@timesgroup.com

Mumbai: The Indian economy, even after recovering from

Covid

, cannot return to the same path of

hyper-globalisation

and export-oriented growth. According to

Dani Rodrik

,

Ford Foundation Professor

of International Political Economy at the

John F Kennedy School of Government

at

Harvard University

, India should welcome foreign investments but should avoid

capital account convertibility

as it is not advantageous to developing economies.

Speaking at the

SBI Economic Conclave

, Rodrik, author of ‘

The Globalization Paradox

’, said that world trade increased at a much faster pace during the Breton Woods period compared to the much more open hyper-globalisation practised post-’90s.

“The paradox is resolved by understanding that a system of moderation, that is modest and allows nations to pursue strategies in line with the domestic objective, is not only better in terms of domestic harmony but also allows faster growth of trade and investment. Countries with social peace are more likely to be open to investment,” said Rodrik.


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