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J-Curve of Productivity and Growth: Indian Manufacturing Post-Liberalization

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  • Mr. Arvind Virmani
  • Mr. Danish A Hashim

Abstract

Most estimates of Indian manufacturing productivity find a slowdown in the 1990s. This has puzzled analysts, given that 1990s reforms were deeper and wider than the 1980s reforms that raised the growth rate of the Indian economy by 2 per cent points. This paper tests the hypothesis of the J curve of Productivity and Growth following major liberalization and finds it to be broadly supported by the data: Technological obsolescence, gradual adoption of new technology and learning by doing result in negative effects on measured productivity.

Suggested Citation

  • Mr. Arvind Virmani & Mr. Danish A Hashim, 2011. "J-Curve of Productivity and Growth: Indian Manufacturing Post-Liberalization," IMF Working Papers 2011/163, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2011/163
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    References listed on IDEAS

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    Cited by:

    1. Ghani, Ejaz & Kerr, William R. & O’Connell, Stephen D, 2011. "Who Creates Jobs?," World Bank - Economic Premise, The World Bank, issue 70, pages 1-7, November.
    2. Bishwanath Goldar & K. L. Krishna & Suresh Chand Aggarwal & Deb Kusum Das & Abdul Azeez Erumban & Pilu Chandra Das, 2017. "Productivity growth in India since the 1980s: the KLEMS approach," Indian Economic Review, Springer, vol. 52(1), pages 37-71, December.
    3. Ghosh Dastidar, Sayantan, 2015. "Manufacturing and Trade Liberalisation of India: Continuing the Debate," MPRA Paper 61907, University Library of Munich, Germany.
    4. Ghani, Ejaz & Kerr, William R. & O'Connell, Stephen D., 2013. "The exceptional persistence of India's unorganized sector," Policy Research Working Paper Series 6454, The World Bank.
    5. Arvind Virmani, 2012. "India," Review of Market Integration, India Development Foundation, vol. 4(2), pages 159-195, August.
    6. Weilin Liu, 2022. "Did Trade Liberalization Boost Total Factor Productivity Growth in Manufacturing in India in the 1990s?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 43, pages 110-139, Fall.
    7. Rawat, Pankaj S. & Sharma, Seema, 2021. "TFP growth, technical efficiency and catch-up dynamics: Evidence from Indian manufacturing," Economic Modelling, Elsevier, vol. 103(C).
    8. SHARMA Anand, 2017. "Dynamic Externalities And Regional Manufacturing Growth: Evidence From India," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 12(1), pages 185-201, April.
    9. Pankaj Vashisht, 2018. "Destruction or Polarization: Estimating the Impact of Technology on Jobs in Indian Manufacturing," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 61(2), pages 227-250, June.
    10. Ghosh, Saibal, 2013. "Do economic reforms matter for manufacturing productivity? Evidence from the Indian experience," Economic Modelling, Elsevier, vol. 31(C), pages 723-733.
    11. Mr. Arvind Virmani, 2012. "Accelerating And Sustaining Growth: Economic and Political Lessons," IMF Working Papers 2012/185, International Monetary Fund.

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