Convergence Club Empirics: Some Dynamics and Explanations of Unequal Growth Across Indian States

43 Pages Posted: 21 Feb 2008

See all articles by Sanghamitra Bandyopadhyay

Sanghamitra Bandyopadhyay

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)

Date Written: March 2003

Abstract

This paper documents the convergence of incomes across Indian states over the period 1965 to 1998. It departs from traditional analyses of convergence by tracking the evolution of the entire income distribution, instead of standard regression and time series analyses. The findings reveal twin-peaks dynamics ¿ the existence of two income convergence clubs, one at 50 per cent, another at 125% of the national average income. Income disparities across states seem to have declined over the sixties, only to increase over the following three decades. The observed polarization is strongly explained by the disparate distribution of infrastructure, and that of education, and to an extent by a number of macroeconomic indicators, that of capital expenditure and fiscal deficits.

JEL Classification: C13, D63

Suggested Citation

Bandyopadhyay, Sanghamitra, Convergence Club Empirics: Some Dynamics and Explanations of Unequal Growth Across Indian States (March 2003). LSE STICERD Research Paper No. 69, Available at SSRN: https://ssrn.com/abstract=1094862

Sanghamitra Bandyopadhyay (Contact Author)

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) ( email )

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