 Post-Independence India: A Case of Finance-Led Industrialization?No 19, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics Abstract: This paper examines whether financial intermediaries have played a leading role in influencing India's economic performance. After describing the evolution and functions of the financial sector, we construct a set of vector autoregressive and vector error correction models to evaluate the strength and direction of the links between measures of formal intermediation and various economic aggregates. The results suggest that (i) the financial sector was instrumental not only in promoting aggregate investment and output, but also in the steady shift toward industry that has characterized India's development; (ii) the operative channel was one of debt accumulation rather than improvements in total factor productivity; and (iii) its contributions went beyond the passive support of fiscal policy. Keywords: Finance; India; industrialization; VAR; VECM (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0019 Access Statistics for this paper More papers in Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics Contact information at EDIRC. |
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