The Evolution of Wealth-Income Ratios in India 1860-2012
37 Pages Posted: 5 Feb 2018 Last revised: 5 Oct 2018
Date Written: September 28, 2018
This article is about the metamorphoses of aggregate Indian wealth over fifteen politically transformative decades. Based on a comprehensive new database, I find that wealth-income ratios have fluctuated tremendously in the twentieth century. In emerging India of the twenty first century, wealth is quickly attaining the same disproportionate size (relative to national income) that was seen during economic downturns in interwar colonial India. The long run U shaped trajectories of wealth-income ratios are reasonably explained by a mid century asset price slowdown and the return of high land shares in national wealth. Implications for balanced growth models are not too sanguine because rising wealth-income ratios have become visible in most large economies, irrespective of their stage of capitalist development.
Keywords: Wealth-Income Ratio, India, Growth
JEL Classification: E10, D30, D31
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