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Relationships between Household Consumption and Inequality in the Indian States

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  • Andrew McKay
  • Sarmistha Pal

Abstract

Current evidence on the relationships between growth and inequality is predominantly based on cross-country data sets or panel data sets covering a small number of time periods. But these relationships, being fundamentally dynamic in nature, need to be considered over a much longer time horizon. Available state level results from the National Sample Surveys in India provide such an opportunity. This article uses this unique data set to examine the interrelationships between average consumption and inequality within states, and test for causality. Distributional patterns of growth vary, but there is strong evidence in many instances of a strong negative effect of initial inequality on subsequent growth.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Development Studies.

Volume (Year): 40 (2004)
Issue (Month): 5 ()
Pages: 65-90

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Handle: RePEc:taf:jdevst:v:40:y:2004:i:5:p:65-90

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  1. Persson, T. & Tabellini, G., 1993. "Is Inequality Harmful for Growth," Papers 537, Stockholm - International Economic Studies.
  2. Sugata Ghosh & Sarmistha Pal, 2004. "The Effect of Inequality on Growth: Theory and Evidence from the Indian States," Review of Development Economics, Wiley Blackwell, vol. 8(1), pages 164-177, 02.
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  8. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
  9. Datt, Gaurav & Ravallion, Martin, 1990. "Regional disparities, targeting, and poverty in India," Policy Research Working Paper Series 375, The World Bank.
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Cited by:
  1. Sarmistha Pal & Sugata Ghosh, 2006. "Elite Dominance and Under-investment in Mass Education: Disparity in the Social Development of the Indian States, 1960-92," Economics and Finance Discussion Papers 06-14, Economics and Finance Section, School of Social Sciences, Brunel University.

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