 Structural transformation and productivity growth in India during 1960–2010Economic Modelling, 2019, vol. 82, issue C, 401-419 Abstract: In this paper, we examine the role of structural change and sectoral productivity growth in explaining the aggregate productivity of India relative to the United Sates during 1960–2010. We set up a simple two sector general equilibrium model and calibrate it to fit the structural transformation of United States. Our calibrated model for India highlights the relative importance of agricultural productivity growth in explaining its slow process of catching up in terms of aggregate productivity. We show that India could have progressed at a much faster rate and closed a substantial part of its aggregate productivity gap if its agricultural sector had grown at a rate at par with the United States. It is India's relative productivity growth in the non-agricultural sector that explains all the recent success in its closing the aggregate productivity gap with the United States. We also found that an elimination of relative distortion in agriculture in India could result into a modest improvement in the aggregate labour productivity. Keywords: Agricultural productivity; Structural transformation; Sectoral productivity growth; Catching up; Calibration; Role of Institution; Distortions (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:eee:ecmode:v:82:y:2019:i:c:p:401-419 DOI: 10.1016/j.econmod.2019.01.019 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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