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Has India emerged? Business cycle facts from a transitioning economy

Author Info

Listed author(s):
  • Ghate, Chetan

    ()

  • Pandey, Radhika

    ()

  • Patnaik, Ila

    ()

    (National Institute of Public Finance and Policy)

Abstract

This paper presents a comprehensive set of stylised facts for business cycles in India from 1950 - 2009. We find that the nature of the business cycle has changed dramatically after India's liberalisation reforms in 1991. In particular, after the the mid 1990s, the properties of India's business cycle has moved closer in key respects to select advanced countries. This is consistent with India's structural transformation from a pre-dominantly agricultural and planned developing economy to a more mar- ket based industrial-income economy. We also identify in what respects the behaviour of the Indian business cycle is different from that of other advanced economies, and closer to that of other less developed economies. This is the first exercise of this kind to generate an exhaustive set of stylised facts for India using both annual and quarterly data.

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Paper provided by National Institute of Public Finance and Policy in its series Working Papers with number 11/88.

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Length: 27
Date of creation: Apr 2011
Handle: RePEc:npf:wpaper:11/88
Note: Working Paper 88, 2011
Contact details of provider: Web page: http://www.nipfp.org.in

Keywords: Macroeconomics ; Real business cycles ; Emerging market DSGE models ; Volatility and growth;

Find related papers by JEL classification:

  • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
  • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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  1. Calderon, Cesar & Fuentes, Rodrigo, 2010. "Characterizing the business cycles of emerging economies," Policy Research Working Paper Series 5343, The World Bank.
  2. Aghion, Philippe & Angeletos, George-Marios & Banerjee, Abhijit & Manova, Kalina, 2010. "Volatility and growth: Credit constraints and the composition of investment," Journal of Monetary Economics, Elsevier, vol. 57(3), pages 246-265, April.
  3. Ambler, Steve & Cardia, Emanuela & Zimmermann, Christian, 2004. "International business cycles: What are the facts?," Journal of Monetary Economics, Elsevier, vol. 51(2), pages 257-276, March.
  4. Javier Garcia-Cicco & Roberto Pancrazi & Martin Uribe, 2010. "Real Business Cycles in Emerging Countries?," American Economic Review, American Economic Association, vol. 100(5), pages 2510-2531, December.
  5. Aguiar, Mark & Gopinath, Gita, 2007. "Emerging Market Business Cycles: The Cycle is the Trend," Scholarly Articles 11988098, Harvard University Department of Economics.
  6. Nicoletta Batini & Vasco J. Gabriel & Paul Levine & Joseph Pearlman, 2010. "A Floating versus Managed Exchange Rate Regime in a DSGE Model of India," NIPE Working Papers 31/2010, NIPE - Universidade do Minho.
  7. César Calderón & Rodrigo Fuentes, 2006. "Complementarities between Institutions and Openness in Economic Development: Evidence for a Panel of Countries," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 43(127), pages 49-80.
  8. Rand, John & Tarp, Finn, 2002. "Business Cycles in Developing Countries: Are They Different?," World Development, Elsevier, vol. 30(12), pages 2071-2088, December.
  9. C. Emre Alper, 2002. "Business Cycles, Excess Volatility, and Capital Flows: Evidence from Mexico and Turkey," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 38(4), pages 25-58, August.
  10. Shah, Ajay & Patnaik, Ila, 2010. "Stabilising the Indian business cycle," Working Papers 10/67, National Institute of Public Finance and Policy.
  11. Hilde Christiane BjÛrnland, 2000. "Detrending methods and stylized facts of business cycles in Norway - an international comparison," Empirical Economics, Springer, vol. 25(3), pages 369-392.
  12. Pami Dua & Anirvan Banerji, 2001. "An Indicator Approach to Business and Growth Rate Cycles: The Case of India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 36(1), pages 55-78, January.
  13. Alessandra Iacobucci & Alain Noullez, 2005. "A Frequency Selective Filter for Short-Length Time Series," Computational Economics, Springer;Society for Computational Economics, vol. 25(1), pages 75-102, February.
  14. M. Ayhan Kose & Christopher Otrok & Charles H. Whiteman, 2003. "International Business Cycles: World, Region, and Country-Specific Factors," American Economic Review, American Economic Association, vol. 93(4), pages 1216-1239, September.
  15. Rachel Male, 2010. "Developing Country Business Cycles: Revisiting the Stylised Facts," Working Papers 664, Queen Mary University of London, School of Economics and Finance.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. On Powerful Macroeconomic Concepts: Consumption Smoothing
    by paragwaknis in Musings of the Sorts on 2013-03-29 01:04:36
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:

  1. Rudrani Bhattacharya & Ila Patnaik, 2016. "Financial Inclusion, Productivity Shocks, and Consumption Volatility in Emerging Economies," World Bank Economic Review, World Bank Group, vol. 30(1), pages 171-201.
  2. Muhammad Ali Choudhary & Farooq Pasha, 2013. "The RBC View of Pakistan: A Declaration of Stylized Facts and Essential Models," SBP Working Paper Series 56, State Bank of Pakistan, Research Department.
  3. Parag, Waknis, 2012. "Political economy of sub-national spending in India," MPRA Paper 36813, University Library of Munich, Germany.
  4. Mitra, Shalini, 2013. "Informality, financial development and macroeconomic volatility," Economics Letters, Elsevier, vol. 120(3), pages 454-457.
  5. Rajesh, Raj & Bharti, Nalin, 2016. "Monsoon Fluctuation And Consumption Expenditure In India," Journal of Central European Green Innovation, Károly Róbert University College, vol. 4(1).

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