J-Curve of Productivity and Growth: Indian Manufacturing Post-Liberalization

Author/Editor:

Arvind Virmani ; Danish A Hashim

Publication Date:

July 1, 2011

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Most estimates of Indian manufacturing productivity find a slowdown in the 1990s. This has puzzled analysts, given that 1990s reforms were deeper and wider than the 1980s reforms that raised the growth rate of the Indian economy by 2 per cent points. This paper tests the hypothesis of the J curve of Productivity and Growth following major liberalization and finds it to be broadly supported by the data: Technological obsolescence, gradual adoption of new technology and learning by doing result in negative effects on measured productivity.

Series:

Working Paper No. 2011/163

Subject:

English

Publication Date:

July 1, 2011

ISBN/ISSN:

9781455298730/1018-5941

Stock No:

WPIEA2011163

Pages:

34

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