Abstract
The reforms initiated in the Indian economy during the nineties have given rise to a lot of debate on the feasibility as well as the stability of high growth rates for the economy. We analyse this issue within the framework of a macro-econometric model, which takes into account the long run structures of the economy as well as the changes that have taken place following the reforms process. The simulation results from this model indicate that acceleration in the long run growth rate, from its current level of 5.5-6 per cent, is possible only if significant improvements take place in investment rate and the productivity of capital. The results also demonstrate that the economy has now become much more resilient after the reforms and can maintain an average growth of 5 percent even under adverse circumstances.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Ahluwalia, I.J. (1979), Behaviour of Prices and Output in India: A Macroeconometric Approach (Delhi: Macmillan Company of India).
Ahluwalia, I.J. and C. Rangarajan (1986), Agriculture and Industry: A Study of Linkages, the Indian Experience, VIII, World Economic Congress of International Association, December.
Bhattacharya, B.B.(1987), The Effectiveness of monetary Policy in controlling inflation: The Indian experience, 1951–85, Prajnan, Vol.XVI (4).
Bhattacharya, B.B. and C.H. Hanumantha Rao (1986), Agriculture-lndustry Interrelations: Issues of Relative Growth in the Context of Public Investment, (Mimeo.), Institute of Economic Growth, Delhi.
Bhattacharya, B.B., R.B. Barman and A.K. Nag (1994), Stabilisation Policy Options: A Macroeconometric analysis, Development Research Group, Study 8, Department of Economic Analysis and Policy, Reserve Bank of India, Bombay.
Bhattacharya, B.B. and S. Kar (2002a), A Macro-Econometric Model of the Indian Economy: Some Theoretical Aspects, Discussion paper, Institute of Economic Growth, Delhi, March.
Bhattacharya, B.B. and S. Kar (2002b), A Macro-Econometric Model of the Indian Economy: Some Empirical Results, Discussion paper, Institute of Economic Growth, Delhi, March.
Bhattacharya, B.B. and S. Kar (2002c), Short and medium run growth and stability: A Macro-Econometric Analysis and Forecasts for India, Working paper, Institute of Economic Growth, Delhi.
Chakravarty, S. (1979), Keynes, Classics and Developing Economies, in C.H.H. Rao and P.C. Joshi (eds.), Reflections on Economic Development and Social Change, Allied Publishers, Delhi.
Desai, M.J. (1973) ‘Macro Econometric Models for India: A Survey’, Sankhya, series B, vol. 3, part 2, pp.169–206.
Kannan, R. (1985), An Econometric Model of Foreign trade Sector (1956/57-1979/80), Reserve Bank of India Occasional Papers, Vol.6 (1), June.
Klein, L.R. (1950), Economic Fluctuations in the United States, 1921-1941 (New York: John Wiley).
Klein, L.R. (1984), Econometric Models, Planning and Developing Countries, Development Perspectives, Institute of Economic Growth Silver Jubilee Lecture, B.R.Publishing Co., 1988.
Klein, L. R. and A. S. Goldberger (1955), An Econometric Model of the United States, 1929–1952. (Amsterdam: North Holland).
Pandit, V. (1984), Macroeconomic Adjustments in a Developing Economy: A Medium Term Model of Outputs and Prices in India, Indian Economic Review, Vol.XIX (1),; reprinted in K. Krishnamurty and V. Pandit, Macroeconometric Modelling of the Indian Economy, Hindustan Publishing Co., 1985.
Pandit, V. (1989), Macroeconomic Character of the Indian Economy: Theories, Facts and Fancies, (Mimeo.), Delhi School of Economics, September.
Pandit, V. and B.B. Bhattacharya (1987), Resource Mobilization, Growth and Inflation: A Trade-Off Analysis for India, Asia Pacific Economies: Promises and Challenges. Research in International Business and Management, Vol.6, Part A.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Bhattacharya, B.B., Kar, S. Growth and Stability in the Indian Economy in Post Reform Era: A Macro Econometric Evaluation. J. Quant. Econ. 2, 76–103 (2004). https://doi.org/10.1007/BF03404610
Published:
Issue Date:
DOI: https://doi.org/10.1007/BF03404610