ESRI Discussion Paper Series No.338India in the World Economy: Inferences from Empirics of Economic Growth
Abstract
The aim of this study is to investigate the growth experiences of India in relation to the experiences of around one hundred countries in the world during the last half-century by exploiting the inferences drawn from the cross-country growth regressions. This study obtains the following findings. First, the outcome of growth regression supports the conditional convergence hypothesis. In contrast, both India's growth rate and income level have increased, breaking the convergence hypothesis. Second, the growth regression shows life expectancy at birth, investment ratio and external openness contributes to economic growth. In India these three were improved. Third, the growth regression suggests human capital has a non-linear effects on economic growth and that the schooling years beyond 3 years raise the growth rate. In India both schooling years and growth rate have increased. Fourth, the growth regression shows that total fertility rate has a negative effect on the growth. In India the growth rate increased as the total fertility rate declined. Fifth, the growth regression shows that government consumption reduces the growth rate. Contrary to the regression results both India's growth rate and government consumption have increased. Sixth, the growth regression suggests inflation has a negative effect on growth rate. However, there are no clear relationship between inflation and growth in India. Seventh, the growth regression shows the improvement of terms of trade contributes to economic growth. The same was observed in India where terms of trade fluctuated over time. Finally the growth regression supposes that democracy and economic growth have a non-linear complex relationship and that the relationship differs depending on the position of the distribution of growth rates.There are no clear relationship between democracy and growth in India where the India's status of democracy has hardly varied.
- JEL classification: O11, O47, O53
- Key words: economic growth, growth regression, India.
Structure of the whole text(PDF-Format 1 File)
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1ページAbstract
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2ページ1. Introduction
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2ページ2. Economic Growth Model as a Theoretical Benchmark
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4ページ3. Growth Experience of India from Inferences of Growth Regression
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4ページ3.1. Absolute versus Conditional Convergences
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5ページ3.2 Urbanization and Economic Growth
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7ページ3.3 Basic Growth Regression
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13ページ3.4 Robustness of Basic Growth Regression
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14ページConcluding Remarks
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16ページReferences
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20ページFigure
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20ページFigure 1 The Dynamics of the Neoclassical Growth Model
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21ページFigure 2 Absolute Convergence in the Neoclassical Growth Model
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22ページFigure 3 Conditional Convergence in the Neoclassical Growth ModelPanel A: Different Saving Rates
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23ページFigure 4 Simple correlation between the growth rate of per capita GDP and log of initial per-capita GDP.
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24ページFigure 5 Partial relation between the growth rate of per-capita GDP and log of initial per capita GDP.
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25ページFigure 6 Partial relation between the growth rate of per-capita GDP and upper-level schooling years.
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26ページFigure 7 Partial relation between the growth rate of per-capita GDP and inverted value of life expectancy at birth.
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27ページFigure 8 Partial relation between the growth rate of per-capita GDP and total fertility rate.
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28ページFigure 9 Partial relation between the growth rate of per-capita GDP and government consumption to GDP.
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29ページFigure 10 Partial relation between the growth rate of per-capita GDP and investment to GDP.
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30ページFigure 11 Partial relation between the growth rate of per-capita GDP and inflation rate.
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31ページFigure 12 Partial relation between the growth rate of per-capita GDP and change in terms of trade.
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32ページFigure 13 Partial relation between the growth rate of per-capita GDP and external openness ratio.
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33ページFigure 14 Partial relation between the growth rate of per-capita GDP and democracy index.
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34ページFigure 15 Growth Rates during 1960–2010
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35ページTable
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35ページTable 1 Descriptive Statistics and Expected Sign of Growth Regression
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36ページTable 2 Data for China and India
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37ページTable 3 Regression for annual growth rate of per capita GDP
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38ページTable 4 Fixed-effect regression for annual growth rate of per capita GDP
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