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Understanding the Economic Growth of West Bengal: A Multiple Structural Breaks Approach

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  • Debolina Biswas

Abstract

This article tries to understand the economic growth of West Bengal by using the Bai–Perron method of multiple structural break analysis. It is found that between 1960 and 2014, the Bengal economy had witnessed two breaks in its output growth. The first break occurred in 1983 and was influenced by a break in the agrarian sector, an outcome propelled by the shift in the political regime and changes in policy prescriptions. The second break happened in 1993; it was preceded by the break in the service sector and a shift in the policy paradigm within the same political dispensation. This study has further investigated the characteristics of the various growth phases in terms of sectoral composition and policies. It is identified that the West Bengal economy has moved from a low growth phase to a medium or balanced growth phase followed by a high growth phase. The low growth phase had witnessed an agrarian impasse, industrial deceleration and political instability. In contrast, the medium growth phase recorded an unprecedented agrarian growth and political stability. The high growth phase has seen a huge growth in the tertiary sector and political instability during its later half. JEL Classification: R11

Suggested Citation

  • Debolina Biswas, 2020. "Understanding the Economic Growth of West Bengal: A Multiple Structural Breaks Approach," Indian Journal of Human Development, , vol. 14(1), pages 62-75, April.
    • Handle: RePEc:sae:inddev:v:14:y:2020:i:1:p:62-75
    DOI: 10.1177/0973703020923444
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    References listed on IDEAS

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    1. Jushan Bai & Pierre Perron, 2003. "Computation and analysis of multiple structural change models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(1), pages 1-22.
    2. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
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    Cited by:

    1. Joshua A. Ndako & Terver T. Kumeka & Festus F. Adedoyin & Simplice A. Asongu, 2022. "Structural Breaks in Global Stock Markets: Are they caused by Pandemics, Protests or other factors?," Working Papers of the African Governance and Development Institute. 22/076, African Governance and Development Institute..
    2. Manikantha Nataraj & Soham Bhattacharya, 2023. "Bitter Convergence: Contemporary Crisis of Labour in Rural West Bengal," BASE University Working Papers 17/2023, BASE University, Bengaluru, India.
    3. Nataraj, Manikantha & Bhattacharya, Soham, 2020. "Bitter Convergence: Contemporary Crisis of Labour in Rural West Bengal," MPRA Paper 103363, University Library of Munich, Germany.

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    More about this item

    Keywords

    Growth; West Bengal; structural break; policy regime;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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