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

41 Pages Posted: 5 Oct 2015

Date Written: November 2015

Abstract

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.

Suggested Citation

Nell, Kevin S., The Complementary Nature between Technological Progress and Capital Accumulation in India's Long‐Run Growth Transitions (November 2015). Metroeconomica, Vol. 66, Issue 4, pp. 565-605, 2015, Available at SSRN: https://ssrn.com/abstract=2668870 or http://dx.doi.org/10.1111/meca.12082

Kevin S. Nell (Contact Author)

Universidade do Porto ( email )

Rua Dr. Roberto Frias
4200-464 Porto
Portugal

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