Podcast
Questions and Answers
What does a higher population growth rate n imply for the steady-state capital-output ratio κ*?
What does a higher population growth rate n imply for the steady-state capital-output ratio κ*?
- It increases the steady-state capital-output ratio.
- It leads to a more capital-intensive economy.
- It decreases the steady-state capital-output ratio. (correct)
- It does not affect the steady-state capital-output ratio.
At the steady state, what is true about the growth rate of capital g(k) relative to output g(y)?
At the steady state, what is true about the growth rate of capital g(k) relative to output g(y)?
- g(k) is equal to g(y). (correct)
- g(k) is always greater than g(y).
- There is no relationship between g(k) and g(y).
- g(k) is always less than g(y).
Which factor detracts from capital deepening in an economy?
Which factor detracts from capital deepening in an economy?
- Lower initial output per worker.
- Higher population growth rate. (correct)
- Increased savings rate.
- Decreased technology gap.
What captures how far an economy is from its steady-state growth path?
What captures how far an economy is from its steady-state growth path?
What is κ* in the equation κ* = s / (n + g + δ)?
What is κ* in the equation κ* = s / (n + g + δ)?
What triggered the bold neoliberal economic reforms in India in 1991?
What triggered the bold neoliberal economic reforms in India in 1991?
Who were the key figures responsible for implementing the neoliberal reforms in India?
Who were the key figures responsible for implementing the neoliberal reforms in India?
What was the expected outcome of the economic growth pace in India post-1991?
What was the expected outcome of the economic growth pace in India post-1991?
What is not considered a proximate determinant of growth?
What is not considered a proximate determinant of growth?
How did India's economic growth from 1950 to 1980 compare to other economies?
How did India's economic growth from 1950 to 1980 compare to other economies?
What was the annual real GDP growth rate for India from 1980 to 1990?
What was the annual real GDP growth rate for India from 1980 to 1990?
What was India's annual real GDP per capita growth from 1990 to 2000?
What was India's annual real GDP per capita growth from 1990 to 2000?
Which statement about India's investment share and population growth is correct?
Which statement about India's investment share and population growth is correct?
Which of the following statements best describes the impact of the 'license raj' on Indian economic growth?
Which of the following statements best describes the impact of the 'license raj' on Indian economic growth?
What factor contributed to India's relatively high savings rate in the decades following World War II?
What factor contributed to India's relatively high savings rate in the decades following World War II?
How did India's economic growth during the 1990s compare to the decades before 1980?
How did India's economic growth during the 1990s compare to the decades before 1980?
What does the phrase 'doubling every sixteen years' refer to in the context of India's economic growth?
What does the phrase 'doubling every sixteen years' refer to in the context of India's economic growth?
Which of the following was NOT mentioned as an advantage that could have promoted faster growth in India?
Which of the following was NOT mentioned as an advantage that could have promoted faster growth in India?
What was observed about poverty and inequality during India's growth period in the 1990s?
What was observed about poverty and inequality during India's growth period in the 1990s?
What does it mean for Indian GDP per capita to approach that of the United States by 2250?
What does it mean for Indian GDP per capita to approach that of the United States by 2250?
What contrasting observation is made about India's economic growth miracle?
What contrasting observation is made about India's economic growth miracle?
What does the estimated equation account for regarding growth rates among the studied countries?
What does the estimated equation account for regarding growth rates among the studied countries?
Which factor is suggested to significantly influence the population growth rate?
Which factor is suggested to significantly influence the population growth rate?
How does the investment share relate to the growth in the equation discussed?
How does the investment share relate to the growth in the equation discussed?
What was indicated about India's economic growth from independence to the late 1980s?
What was indicated about India's economic growth from independence to the late 1980s?
What is suggested about the non-structural nature of the regression analysis discussed?
What is suggested about the non-structural nature of the regression analysis discussed?
What characterized India's economic growth rate before the late 1980s?
What characterized India's economic growth rate before the late 1980s?
Which major political figure's policies contributed to the 'license raj'?
Which major political figure's policies contributed to the 'license raj'?
What significant change occurred in India's economy starting in the late 1980s?
What significant change occurred in India's economy starting in the late 1980s?
Which reform is often associated with the acceleration of India's economic growth?
Which reform is often associated with the acceleration of India's economic growth?
What was the effect of the 'license raj' on the private sector in India?
What was the effect of the 'license raj' on the private sector in India?
The doubling time for average GDP per capita in India since the late 1980s is approximately:
The doubling time for average GDP per capita in India since the late 1980s is approximately:
Who was the Prime Minister of India when the first notable economic reforms started to be recognized?
Who was the Prime Minister of India when the first notable economic reforms started to be recognized?
What type of economic theory is investigated in relation to India's development?
What type of economic theory is investigated in relation to India's development?
Study Notes
Economic Growth in Independent India
- Economic growth rate of India post-independence appears average until the late 1980s, with output per worker growth in the middle of global distribution.
- Proximate determinants of growth during Nehru's era included capital investment shares and population growth rates, both of which were average for India's development stage.
- Nehru's Fabian socialism and central planning led to the "license raj," characterized by bureaucratic inefficiency and corruption, hindering private sector growth.
Growth Acceleration Post-1990
- Since the late 1980s, India experienced rapid economic growth, with average GDP per capita doubling every sixteen years.
- The growth surge is commonly attributed to neoliberal reforms initiated in the early 1990s under Prime Minister Narasimha Rao and Finance Minister Manmohan Singh.
- However, evidence suggests that the growth acceleration may have begun earlier during Rajiv Gandhi’s administration.
Historical growth performance
- Annual real GDP growth rates were:
- 1950-1980: 3.7%
- 1980-1990: 5.9%
- 1990-2000: 6.2%
- Annual real GDP per capita growth rates were:
- 1950-1980: 1.5%
- 1980-1990: 3.8%
- 1990-2000: 4.4%
Factors Influencing Growth Prior to 1990
- India’s pre-1990 growth was not extraordinary but distinctly positioned between East Asia's rapid growth and Africa's stagnation.
- High savings rates observed in the early post-war decades might have offset inefficient policies.
- Advantages such as a relatively literate population and a strong cultural emphasis on education provided potential for faster growth if well-managed.
Comparison with Current Growth
- Current economic growth contrasts sharply with the sluggish rates observed before 1980, indicating a significant turnaround.
- India's current growth has not resulted in worsening poverty levels, although inequality has increased.
- The emerging growth trends suggest a sustainable economic development model, capable of matching higher productivity levels internationally.
Theoretical Insights
- Modern growth theory may offer critical perspectives on India's economic history.
- Proximate determinants of growth include investment share, population growth, and the existing output per worker level.
- A higher population growth rate limits capital deepening; hence, balancing investment and demographic factors is crucial for robust economic growth.
Conclusion
- India's economic evolution, from average pre-1990 performance to rapid growth in the 1990s, highlights significant shifts in policy and market environment.
- Ongoing analysis and application of growth theory are essential for understanding the complexities of India's development narrative.
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Description
Explore the economic growth narrative of India since gaining independence. This quiz delves into key trends and metrics that define India's economic performance over the decades. Test your understanding of India's growth trajectory and its global position.
