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Indian growth is not overestimated: Mr. Subramanian you got it wrong

Author

Listed:
  • Ashima Goyal

    (Indira Gandhi Institute of Development Research)

  • Abhishek Kumar

    (Indira Gandhi Institute of Development Research)

Abstract

Subramanian (2019) argues that indicators like growth in export, import and private credit can be used to predict economic growth across countries. He finds these indicators were able to predict Indian growth before 2011 but fail to do so after the GDP estimation methodology was changed in 2011. This implies Indian growth was overestimated by 2.5 per annum post 2011. But on removing various flaws in his data and procedures used, we find these indicators underestimate growth before 2011 too. The most reasonable specification suggests that the underestimation before 2011 was higher than underestimation post 2011. Moreover, growth in a large number of countries is found to be either overestimated or underestimated, based on these indicators. His empirical design is therefore flawed. These regressions cannot be used for predicting growth or for concluding Indian growth is overestimated or for pointing to problems in the estimation methodology.

Suggested Citation

  • Ashima Goyal & Abhishek Kumar, 2019. "Indian growth is not overestimated: Mr. Subramanian you got it wrong," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2019-019, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2019-019
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    References listed on IDEAS

    as
    1. David E. BLOOM & Jocelyn E. FINLAY, 2009. "Demographic Change and Economic Growth in Asia," Asian Economic Policy Review, Japan Center for Economic Research, vol. 4(1), pages 45-64, June.
    2. Ashima Goyal & Abhishek Kumar, 2020. "A DSGE Model-Based Analysis of the Indian Slowdown," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 11(01), pages 1-38, April.
    3. Goyal, Ashima & Kumar, Abhishek, 2018. "Active monetary policy and the slowdown: Evidence from DSGE based Indian aggregate demand and supply," The Journal of Economic Asymmetries, Elsevier, vol. 17(C), pages 21-40.
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    Citations

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    Cited by:

    1. Arvind Subramanian, 2019. "Validating India's GDP Growth Estimates," CID Working Papers 357, Center for International Development at Harvard University.
    2. Sinha Roy,Sutirtha & Van Der Weide,Roy, 2022. "Poverty in India Has Declined over the Last Decade But Not As Much As Previously Thought," Policy Research Working Paper Series 9994, The World Bank.

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    More about this item

    Keywords

    Indian growth; overestimation; growth indicators; prediction regressions; impact evaluation;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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