 Madhya Pradesh: Does Agriculture Determine the State’s Growth Trajectory?Margin: The Journal of Applied Economic Research, 2014, vol. 8, issue 1, 39-57 Abstract: This article empirically analyses whether agricultural growth performance determines the growth trajectory of the economy of an Indian state, namely Madhya Pradesh. Long-term growth trends of nearly three decades (1981–2011) in Madhya Pradesh show that fluctuations in agricultural growth and Gross State Domestic Product (GSDP) clearly coincide and have a considerable impact on the overall growth of the state’s economy. In examining this, the agricultural terms of trade are first introduced to capture the relative price responsiveness of agricultural supply in the state. Structural breaks, cointegration and an error correction mechanism are used to explore the long-term relationship between terms of trade, agricultural growth and GSDP growth. Findings show that agricultural fluctuations explain nearly half of fluctuations in the growth of the state economy while agricultural supply remains responsive to price and economic incentives. The analysis suggests that agricultural growth performance remains central to achieving any higher growth trajectory for the state. JEL Classification: C22, C50, Q11, Q18 Keywords: Terms of Trade; Agriculture; Structural Breaks; Supply Elasticity; Cointegration; Error Correction Model (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:sae:mareco:v:8:y:2014:i:1:p:39-57 Access Statistics for this article More articles in Margin: The Journal of Applied Economic Research from National Council of Applied Economic Research |
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