Leverage need not be the sole reason why exit may be volatile after prolonged unconventional policy. As Feroli et. al. argue, investment managers may fear underperforming relative to others. This means they will hold a risky asset only if it promises a risk premium (over safe assets) that makes them confident they will not underperform holding it.
Trade in goods (i.e., exports plus imports) as a proportion of GDP increased from 14.6 per cent in 1990-91 to 28.9 per cent in 2004-05; while gross current account receipts and payments as percentage of GDP increased from 19.4 per cent to 45.0 per cent over the same period, reflecting the growth in buoyant Indian trade in services.