Growth Convergence and Spillovers among Indian States: What Matters? What Does Not?

Author/Editor: Kalra, Sanjay ; Sodsriwiboon, Piyaporn
Publication Date: April 01, 2010
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Summary: Convergence and spillovers across countries and within countries are old, but recurrent policy concerns, and India is no exception to this rule. This paper examines convergence and spillovers across Indian states using non-stationary panel data techniques. Results on convergence among Indian states are generally found to be similar, but more nuanced, than previous studies. Generally speaking, there is evidence of divergence over the entire sample period, convergence during sub-periods corresponding to structural breaks, and club convergence. There is strong evidence of club convergence among the high- and low-income states; the evidence for middle-income states is mixed. Dynamic spillover effects among states are small.
Series: Working Paper No. 10/96
Subject(s): Cross country analysis | Economic growth | Economic models | India | Regional shocks | Spillovers | Time series

Author's Keyword(s): Indian states | convergence | growth theory | non-stationary panels
Publication Date: April 01, 2010
Format: Paper
Stock No: WPIEA2010096 Pages: 34
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