This paper examines the factors responsible for generating the services led growth witnessed in the Indian economy during 1980–2005. A sectoral growth accounting exercise shows that total factor productivity (TFP) growth was the fastest for services; moreover this TFP increase was significant...

The role of infrastructure in fostering economic growth and enhancing public welfare is more pronounced in developing economies like India. At the time of our independence, the national government was unanimous in accepting that a much wider base of infrastructure was the 'sine qua non' of...

This paper explores macroeconomic policies that can sustain structural change in China and India. A two-sector open-economy model with endogenous productivity growth, demand driven output and income distribution as an important determinant of economic activity is calibrated to a 2000 SAM for...

In view of rising inequality in fast growing Asian developing countries, it is important to study the relationship between economic growth and income inequity. We develop a simple model to establish that economic growth and inequality can bear a complex and non-linear relationship if policy...

This paper explores macroeconomic policies that can sustain structural change in China and India. A two-sector open-economy model with endogenous productivity growth, demand driven output and income distribution as an important determinant of economic activity is calibrated to a 2000 SAM for...

It has been observed that human capital is an important factor behind economic growth, especially corresponding to the developed countries or, of the Organization of Economic Cooperation and Development (OECD) countries over the past five decades. The theoretical models differ however regarding...

Market frictions prevent the efficient allocation of factors of production, slow down structural transformation and lead to costs in terms of lower output and aggregate total factor productivity (TFP). We use a theoretical framework developed by Aoki (2012) featuring sector-specific frictions on...

In view of rising inequality in fast growing Asian developing countries, it is important to study the relationship between economic growth and income inequity. We develop a simple model to establish that economic growth and inequality can bear a complex and non-linear relationship if policy...

How should industrial policies be directed to reduce distortions and foster economic development? We study this question in a multi-sector model with technology adoption, where the production of goods and modern technologies features rich network structures. We provide simple formulas for the...

We construct a two-sector (agriculture and modern) overlapping generations growth model calibrated to India to study the effects of sectoral tax rates, sectoral infrastructure investments, and labor market frictions on potential growth in India. Our model is motivated by the idea that because...