Growth, geography, and the iron law: Understanding divergence across Indian districts

Samarjit Das (), Chetan Ghate and Peter Robertson
Additional contact information
Samarjit Das: Indian Statistical Institute, New Delhi

Discussion Papers from Indian Statistical Institute, Delhi

Abstract: The existing literature on Indian growth finds no evidence of B convergence across states. This represents a puzzle given the relatively free flows of capital, labour and commodities across state borders. We use a new data set to estimate convergence rates across 575 Indian districts and find that the pattern of absolute B- divergence remains. To explain this we develop a model of conditional convergence that includes a gravity indicator of trade and migration costs - specifically the distance from a major metropolitan center - as a conditioning variable. We find strong evidence of conditional convergence with an elasticity close to Barro's "iron law". We also find that geography and public infrastructure variables are important conditioning variables.

Keywords: Convergence; Divergence; Indian Economic Growth; Gravity Models (search for similar items in EconPapers)
JEL-codes: O4 O5 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2013-05
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.isid.ac.in/~pu/dispapers/dp13-06.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:alo:isipdp:13-06

Access Statistics for this paper

More papers in Discussion Papers from Indian Statistical Institute, Delhi Contact information at EDIRC.
Bibliographic data for series maintained by Debasis Mishra ().