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Nonlinearity between Infrastructure Inequality and Growth

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  • Nisha S. Simon
  • P. Natarajan

Abstract

Infrastructure, through its direct and indirect effects, has a bearing on growth, equity and overall development of a country. Widening inequality has significant implications for growth and macroeconomic stability leading to suboptimal use of human resources and concentration of decision-making in the hands of a few. This article discusses the relationship between growth and infrastructure inequality in India since the 1990s. Tracing three dimensions of infrastructure inequality over time, this study tests the existence of its nonlinear relationship with growth. Empirical estimates reject the inverted U-shaped and U-shaped patterns between disparity in infrastructure and economic growth. Accelerated decline in infrastructure inequality is depicted with growth in India across infrastructure sectors of transport, energy and communication. Policymakers need to sustain efforts to eradicate infrastructure disparity by following a growth-oriented approach. JEL: C38, H54, I3, O18, O47, R11

Suggested Citation

  • Nisha S. Simon & P. Natarajan, 2017. "Nonlinearity between Infrastructure Inequality and Growth," Review of Market Integration, India Development Foundation, vol. 9(1-2), pages 66-82, April.
    • Handle: RePEc:sae:revmar:v:9:y:2017:i:1-2:p:66-82
    DOI: 10.1177/0974929217721764
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    More about this item

    Keywords

    Infrastructure; economic growth; nonlinearity; inequality;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • 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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