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Identification of Regional Fundamental Economic Structure (FES) of India: An Input-Output and Field of Influence Approach

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Author Info
Thakur, Sudhir K.
Abstract

This study provides an understanding of the Indian regional economy utilizing the fundamental economic structure (FES) approach. The FES construct implies that selected characteristics of an economy will vary predictably with region size, as measured by net state domestic product, population, and total gross output. The big question addressed in this study is if identifiable patterns of relations between various macro aggregates and economic transactions can be revealed via regional input-output tables. Jensen et al. (1988) discuss the tiered, partitioned, and temporal approaches to the identification of FES using input-output tables. This research addresses the following four questions: (1) Does a regional FES exist for the Indian economy during the period 1965? (2) What proportions of the cells are predictable? (3) Can the 1965 regional FES predict 1983-84 table for Punjab economy? (4) Does regional FES manifest an enhanced understanding of the Indian regional structure? Regression analyses are used to identify the FES and non-FES cells for the Indian regional economy. The regional input-output tables for 21 States and Union Territories provide data for the analysis. Analysis reveals regional FES includes primary and secondary sectors as components of FES. This research has extended the notion of FES to include: weak, moderate and strong FES cells.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number RP2008/59.

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Length: 32 pages
Date of creation: 2008
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Handle: RePEc:unu:wpaper:rp2008-59

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Keywords: regions; economic structure; input-output; India;

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  1. Syrquin, Moshe, 1988. "Patterns of structural change," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 7, pages 203-273 Elsevier. [Downloadable!] (restricted)
  2. Syrquin, M. & Chenery, H.B., 1989. "Patterns Of Development, 1950 To 1983," World Bank - Discussion Papers 41, World Bank.
  3. Jeffrey D. Sachs & Nirupam Bajpai & Ananthi Ramiah, 2002. "Understanding Regional Economic Growth in India," Asian Economic Papers, MIT Press, vol. 1(3), pages 32-62. [Downloadable!] (restricted)
  4. Sonis, Michael & Hewings, Geoffrey J D & Guo, Jiemin, 1996. "Sources of Structural Change in Input-Output Systems: A Field of Influence Approach," Economic Systems Research, Taylor and Francis Journals, vol. 8(1), pages 15-32, March.
  5. Thakur, Sudhir K., 2008. "Identification of temporal fundamental economic structure (FES) of India: An input-output and cross-entropy analysis," Structural Change and Economic Dynamics, Elsevier, vol. 19(2), pages 132-151, June. [Downloadable!] (restricted)
  6. Rietveld, Piet, 1989. "Infrastructure and Regional Development: A Survey of Multiregional Economic Models," The Annals of Regional Science, Springer, vol. 23(4), pages 255-74.
  7. Gaiha, Raghav, 1980. "On testing the stability of input-output relationships in the Indian economy," Journal of Development Economics, Elsevier, vol. 7(2), pages 273-282, April. [Downloadable!] (restricted)
  8. Mathur, Ashok, 1983. "Regional Development and Income Disparities in India: A Sectoral Analysis," Economic Development and Cultural Change, University of Chicago Press, vol. 31(3), pages 475-505, April.
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