Although negative shocks have persistent effects on output on average, this paper shows that macroeconomic policies and the structure of the economy can influence the speed of recovery and mitigate the persistence of the shock. Indeed, monetary and fiscal stimulus and foreign aid can spur a...

Intro -- Contents -- I. INTRODUCTION -- II. INDIA CIRCA 1980 -- III. HOW HAS INDIA CHANGED SINCE THE EARLY 1980S? -- IV. THE STATES' STORY -- V. UNDERSTANDING POST-1980 PERFORMANCE -- VI. LOOKING AHEAD -- Appendix: Data Sources and Description -- REFERENCES.