Compare the 2013 taper tantrum and the 2026 oil shock for India. For each: (a) identify the initial shock and its channel into India's balance of payments; (b) list the RBI's tools and classify each as a price tool (rates), a quantity tool (liquidity, reserves) or a capital-flow tool; (c) say which parity condition (CIP, UIP, PPP) each tool works through. (d) Why did the RBI hike in October 2026 when the shock was a supply shock?
M11 · Problem 17 ★★
Case analysis: 2013 and 2026
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