Demand-led versus supply-led growth transitions

Nell, Kevin S.

doi:10.2753/pke0160-3477340406

Cited by 3 publications

(11 citation statements)

References 32 publications

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“…Evidence of a significant break in or around 1980 is consistent with Rodrik and Subramanians (2005) fundamental hypothesis. It is also consistent with several other studies, such as Balakrishnan and Parameswaran (2007), Nell (2012 and Virmani Notes: The average growth rate in each regime (except the financial crisis years during 2008À10) is obtained by estimating the following regression: y t 5 a 1 b 1 t 1 u t ; where y t is the natural logarithm (ln) of real GDP per capita income, t is a time trend and u t is an unobserved disturbance term. The b 1 estimate multiplied by 100 gives the average growth rate.…”

supporting

confidence: 87%

“…The major trade liberalization measures and other structural reforms that were implemented in the post‐1990 period played an important role in sustaining India's initial growth transition from both the demand and supply side (Sen, ; Panagariya, ; Madsen et al . ; Nell, , ).…”

Section: A Complementarity Hypothesis Of India's Growth Transitionsmentioning

confidence: 98%

“…Thus, the empirical results confirm the exogenous nature of the saving/investment rate in equations (12) and (15). 15 15 The theoretical and empirical framework developed in Nell (2012) is specifically designed to test whether investment determines saving via per capita income changes, or whether investment is endogenous to saving. An analysis of this nature falls beyond the scope of the present article.…”

Section: Long-run Exogeneity Testsmentioning

confidence: 99%

“…Whether firms are willing to save and invest a larger fraction of their profit income in the second phase will crucially depend on the investment climate. 2 In addition to Rodrik and Subramanians (2005) influential article, several subsequent studies have also identified the period in or around 1980 as a major turning point in Indias growth performance (see Virmani, 2006;Balakrishnan and Parameswaran, 2007;Nell, 2012Nell, , 2013. 3 The modelling framework incorporates some of the key stylized facts of Indias growth performance that have been identified by Felipe et al (2008) and Sen (2007).…”

Section: Introductionmentioning

confidence: 99%

“…Technology and Capital in India environment, induced private corporate firms to raise their investment in equipment relative to structures since 1980, as captured by stylized fact (iii) in section 2.4. 7 The major trade liberalization measures and other structural reforms that were implemented in the post-1990 period played an important role in sustaining Indias initial growth transition from both the demand and supply side (Sen, 2007;Panagariya, 2008;Madsen et al 2010;Nell, 2012Nell, , 2013.…”

mentioning

confidence: 99%

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The Complementary Nature Between Technological Progress and Capital Accumulation in India's Long‐Run Growth Transitions

Nell

2015

Metroeconomica

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This article develops a multiple‐regime, learning‐by‐doing model, in which technological progress and capital accumulation are complementary factors in long‐run growth transitions. The model accurately predicts India's long‐run growth transitions over the period 1953–2007, with the first phase (1980–2002) being ‘technology’ driven and the second phase (2003–2007) capital accumulation driven. Given the complementary nature between technological progress and capital accumulation, one of the main challenges facing Indian policy makers in the aftermath of the 2008 global financial crisis is to maintain high saving/fixed investment rates. The analysis also provides a critique of the ‘total factor productivity view’ of India's growth performance.

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supporting

confidence: 87%

Section: A Complementarity Hypothesis Of India's Growth Transitionsmentioning

confidence: 98%

Section: Long-run Exogeneity Testsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

mentioning

confidence: 99%

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The Complementary Nature Between Technological Progress and Capital Accumulation in India's Long‐Run Growth Transitions

Nell

2015

Metroeconomica

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An alternative explanation of India's growth transition: a demand-side hypothesis

Nell¹

2012

Cambridge Journal of Economics

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This paper formalises the balance-of-payments-constrained (BPC) growth model in a two-regime framework to reexamine India's growth transition in 1980 from a demand-side perspective, as an alternative to the 'supply-oriented' approaches of previous studies. The results provide strong evidence of a demand-led growth transition. Although the government-led expenditure strategy of the 1980s fulfilled the role of moving the Indian economy out of its slow-growing demand regime (1952-79) into a faster-growing one, it could not sustain demand growth at the natural rate due to a balance-of-payments constraint. Consistent with the prediction of the BPC growth model, faster export growth in the post-1990 liberalisation period sustained demand growth at its maximum rate by allowing expenditure (including government spending) to grow at a fast rate. The analysis further suggests that India's export surge in the post-1990 liberalisation period has a significant demand-side explanation, rather than an exclusively supply-side interpretation.

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Why Has Italy Struggled So Much to Grow Economically Since 1990?

Shi

2023

LNEP

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Italy is one of the worlds major economies, but it is also one of the most struggling major economies in terms of economic development. Especially after 1990, the Italian economy has faced a state of stagnation for a long time, and there has been no sign of improvement until now. The theme of this article is the reason for Italys economic struggle after 1990. Low exports, low domestic demand, and a manufacturing slump are the reasons that led to the Italian economic struggle. Low exports stemmed from joining the Eurozone and the capture of international markets by other countries. Low domestic demand was hit by the double blow of Eurozone accession and high unemployment caused by a closed labour market. And the dormancy of the manufacturing sector is related to the unemployment problem caused by the closed labour market and the lack of domestic demand. Insufficient exports, low aggregate demand, and a weak manufacturing sector are the three main reasons for the economys poor performance, which has led Italy to remain a struggling economy for more than 30 years.

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Demand-led versus supply-led growth transitions

Cited by 3 publications

References 32 publications

The Complementary Nature Between Technological Progress and Capital Accumulation in India's Long‐Run Growth Transitions

The Complementary Nature Between Technological Progress and Capital Accumulation in India's Long‐Run Growth Transitions

An alternative explanation of India's growth transition: a demand-side hypothesis

Why Has Italy Struggled So Much to Grow Economically Since 1990?

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