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Competitive Pressure on the Indian Households: A General Equilibrium Approach

In: Input–Output Economics: Theory And Applications Featuring Asian Economies

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  • Thijs ten Raa
  • Amarendra Sahoo

Abstract

How would competitive pressure impact upon the income distribution and the poverty of household groups? We analyze the gains in efficiency and productivity due to competitive pressure, and its distributional effects using a general equilibrium input–output framework. The efficient utilization of the available resources, technical progress and free trade constitute our sources of growth. Welfare would increase under competition, but the income distribution would become more skewed. Rural household groups would stand to lose relative to the urban ones. Urban poverty would be reduced significantly more than rural. In fact, the agricultural worker would even suffer from an increase in poverty. The study shows that competitive pressure has a positive effect on efficiency, productivity and poverty, but an adverse effect on the income distribution in the Indian economy.

Suggested Citation

  • Thijs ten Raa & Amarendra Sahoo, 2009. "Competitive Pressure on the Indian Households: A General Equilibrium Approach," World Scientific Book Chapters, in: Input–Output Economics: Theory And Applications Featuring Asian Economies, chapter 26, pages 519-538, World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789812833679_0026
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    1. Srinivasan, T.N. & Bhagwati, J., 1999. "Outward-Orientation and Development: Are Revisionist Right?," Papers 806, Yale - Economic Growth Center.
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    Cited by:

    1. John Gilbert, 2009. "Agricultural Trade Reform Under Doha and Poverty in India," Working Papers 2009-03, Utah State University, Department of Economics, revised 28 Jun 2009.
    2. Tarancon, Miguel Angel & Del Río, Pablo, 2012. "Assessing energy-related CO2 emissions with sensitivity analysis and input-output techniques," Energy, Elsevier, vol. 37(1), pages 161-170.
    3. Melville Saayman & Riaan Rossouw, 2011. "The Significance of Festivals to Regional Economies: Measuring the Economic Value of the Grahamstown National Arts Festival in South Africa," Tourism Economics, , vol. 17(3), pages 603-624, June.
    4. Pieters, Janneke, 2010. "Growth and Inequality in India: Analysis of an Extended Social Accounting Matrix," World Development, Elsevier, vol. 38(3), pages 270-281, March.
    5. Sahoo, A., 2008. "Essays on the Indian economy : Competitive pressure, productivity and performance," Other publications TiSEM 374e9035-815c-43fe-a68e-e, Tilburg University, School of Economics and Management.

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    More about this item

    Keywords

    Input–Output Analysis; National Accounts; Productivity; Performance; Canadian Economy; Chinese Economy; Indian Economy; Asian Economics;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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