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Relationships between consumption and inequality in the Indian states

Author

Listed:
  • Andrew McKay

    (Nottingham University)

  • Sarmistha Pal

    (Cardiff Business School)

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.

Suggested Citation

  • Andrew McKay & Sarmistha Pal, 2003. "Relationships between consumption and inequality in the Indian states," Development and Comp Systems 0309005, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpdc:0309005
    Note: Type of Document - ; pages: 30
    as

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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/dev/papers/0309/0309005.pdf
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    References listed on IDEAS

    as
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    13. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Growth and inequality; Restricted VAR analysis; Causality tests; Panel data analysis; Indian states.;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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