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

35 Pages Posted: 19 Apr 2010

See all articles by Sanjay Kalra

Sanjay Kalra

International Monetary Fund (IMF) - Asia and Pacific Department

Piyaporn Sodsriwiboon

International Monetary Fund (IMF)

Date Written: April 2010

Abstract

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.

Keywords: Cross country analysis, Economic growth, Economic models, India, Regional shocks, Spillovers, Time series

Suggested Citation

Kalra, Sanjay and Sodsriwiboon, Piyaporn, Growth Convergence and Spillovers Among Indian States: What Matters? What Does Not? (April 2010). IMF Working Paper No. 10/96, Available at SSRN: https://ssrn.com/abstract=1590709

Sanjay Kalra (Contact Author)

International Monetary Fund (IMF) - Asia and Pacific Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Piyaporn Sodsriwiboon

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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