Relationships between consumption and inequality in the Indian states

Andy McKay and Sarmistha Pal

Development and Comp Systems from University Library of Munich, Germany

Abstract: Current evidence on the relationships between growth and inequality is predominantly based on cross-country data sets or panel data sets covering a small number of time periods. But these relationships, being fundamentally dynamic in nature, need to be considered over a much longer time horizon. Available state level results from the National Sample Surveys in India provide such an opportunity. This paper uses this unique data set to examine the interrelationships between average consumption and inequality within states, and test for causality. Distributional patterns of growth vary, but there is strong evidence in many instances of a strong negative effect of initial inequality on subsequent growth.

Keywords: Growth and inequality; Restricted VAR analysis; Causality tests; Panel data analysis; Indian states. (search for similar items in EconPapers)
JEL-codes: O11 O15 O18 O40 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2003-09-09
New Economics Papers: this item is included in nep-dev
Note: Type of Document - ; pages: 30
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpdc:0309005

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