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Revisiting India’s Growth Transitions

Author

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  • Deepankar Basu

    (Department of Economics, University of Massachusetts Amherst)

Abstract

This paper reconsiders two questions relating to India’s economic growth: structural breaks in growth and the impact of equipment investment on aggregate economic growth. First, statistical tests of structural change show that economic growth in post-independence India has witnessed four structural breaks: in 1964-65, in 1978-79, in 1990-91, and in 2004-05. However, substantial growth accelerations, i.e. increase of more than 1.0% per annum in the growth rate of per capita real GDP, occurred only at two points: 1978-79 and 2004-05. Second, to analyze the impact of equipment investment on growth, I use an ARDL bounds testing methodology. I find a positive and statistically significant long run positive impact of private investment in equipment and machinery on the growth rate of real GDP.

Suggested Citation

  • Deepankar Basu, 2020. "Revisiting India’s Growth Transitions," UMASS Amherst Economics Working Papers 2020-01, University of Massachusetts Amherst, Department of Economics.
    • Handle: RePEc:ums:papers:2020-01
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    File URL: https://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1286&context=econ_workingpaper
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    More about this item

    Keywords

    India; economic growth; structural change; ARDL bounds testing.;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • 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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