NO : WP-2019-008
AUTHOR : Ashima Goyal
TITLE : What Explains the Volatility of India’s Catch-up Growth?
ABSTRACT : Indian post reform growth rates have been higher but more volatile compared to transition periods for other comparable countries. The reasons are aggravation of shocks due to unaddressed critical bottlenecks together with pro-cyclical macroeconomic policy that compressed aggregate demand. Reform is required to relieve constraints, but traditional reforms may be neither appropriate nor achievable. Feasible reforms are discussed. Since diversity and resilience has increased and some constraints have eased, the paper argues sustained high growth is reachable with the relevant policy support.
Keywords: India; growth; volatility; resilience; reforms; shocks; pro-cyclical
JEL Code: O11, O23, H50, H77