Kar, Sabyasachi and Jha, Debajit
(2025)
Do growth accelerations help economies escape from low‐growth traps? Evidence from Indian States.
Economics of Transition and Institutional Change.
ISSN 2577-6975
(In Press)
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Abstract
Developing economies are frequently caught in low-growth traps. This paper attempts to test whether a significant growth up-break, known popularly in the literature as growth accelerations, can enable them to break out of such traps. A three-step process is adopted to test this hypothesis. The first step involves identifying economies caught in low-growth traps using the convergence club framework. The second step identifies all growth transitions, that is, growth accelerations and slowdowns, exhibited by these economies. The third step investigates whether having a growth acceleration is positively correlated with converging to a higher-performing growth club, controlling for initial conditions and growth slowdowns. Using this three-step process and using data from subnational regions of India, we next test our hypothesis. Our results show that growth accelerations have indeed played a significant role in club formation in India, enabling subnational regions with such accelerations to break into higher-growth convergence clubs. Finally, drawing on the growth transition literature, our analysis suggests policy strategies for low-growth economies that can help them to ignite growth accelerations and escape to higher-performing clubs.
Item Type: | Article |
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Keywords: | economic reforms | growth accelerations | growth policy | low-growth trap |
Subjects: | Social Sciences and humanities > Economics, Econometrics and Finance > Economics Social Sciences and humanities > Social Sciences > Social Sciences (General) |
JGU School/Centre: | Jindal School of Government and Public Policy |
Depositing User: | Mr. Arjun Dinesh |
Date Deposited: | 04 May 2025 20:28 |
Last Modified: | 04 May 2025 20:28 |
Official URL: | https://doi.org/10.1111/ecot.12455 |
URI: | https://pure.jgu.edu.in/id/eprint/9437 |
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