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The “V-factor”: Distribution, timing and correlates of the great Indian growth turnaround

  • Ghate, Chetan
  • Wright, Stephen

We analyze a panel of output series for India, disaggregated by 15 states and 14 broad industry groups. Using principal components (Bai, 2004; Bai and Ng, 2004) we find that a single common “V-factor” captures well the significant shift in the cross-sectional distribution of state-sectoral output growth rates since the 2nd half of the 1980s. The timing of the turnaround implied by the V-factor is more closely related to the pattern of policy reforms than has been found in previous research. Regression-based analysis also provides some insights into the uneven distribution of the turnaround across Indian states.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 99 (2012)
Issue (Month): 1 ()
Pages: 58-67

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Handle: RePEc:eee:deveco:v:99:y:2012:i:1:p:58-67
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