Sectoral Infrastructure Investments in an Unbalanced Growing Economy: The Case of Potential Growth in India

We construct a two-sector (agriculture and modern) overlapping generations growth model calibrated to India to study the effects of sectoral tax rates, sectoral infrastructure investments, and labor market frictions on potential growth in India. Our model is motivated by the idea that because misall...

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Autores principales:	Chetan Ghate, Gerhard Glomm, Jialu Liu Streeter
Formato:	article
Lenguaje:	EN
Publicado:	World Scientific Publishing 2016
Materias:	Indian economic growth misallocation public capital structural transformation two-sector OLG growth models unbalanced growth Social sciences and state - Asia (Asian studies only) H53
Acceso en línea:	https://doaj.org/article/afaeaf7b2a864338b6c5f5bfb179a2f0
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spelling	oai:doaj.org-article:afaeaf7b2a864338b6c5f5bfb179a2f02021-12-02T12:20:35ZSectoral Infrastructure Investments in an Unbalanced Growing Economy: The Case of Potential Growth in India0116-11051996-724110.1162/ADEV_a_00076https://doaj.org/article/afaeaf7b2a864338b6c5f5bfb179a2f02016-09-01T00:00:00Zhttps://www.mitpressjournals.org/doi/pdf/10.1162/ADEV_a_00076https://doaj.org/toc/0116-1105https://doaj.org/toc/1996-7241We construct a two-sector (agriculture and modern) overlapping generations growth model calibrated to India to study the effects of sectoral tax rates, sectoral infrastructure investments, and labor market frictions on potential growth in India. Our model is motivated by the idea that because misallocation depends on distortions, policies that reduce distortions raise potential growth. We show that the positive effect of a variety of policy reforms on potential growth depends on the extent to which public and private capital are complements or substitutes. We also show that funding more infrastructure investments in both sectors by raising labor income taxes in the agriculture sector raises potential growth.Chetan GhateGerhard GlommJialu Liu StreeterWorld Scientific PublishingarticleIndian economic growthmisallocationpublic capitalstructural transformationtwo-sector OLG growth modelsunbalanced growthSocial sciences and state - Asia (Asian studies only)H53ENAsian Development Review, Vol 33, Iss 2, Pp 144-166 (2016)
institution	DOAJ
collection	DOAJ
language	EN
topic	Indian economic growth misallocation public capital structural transformation two-sector OLG growth models unbalanced growth Social sciences and state - Asia (Asian studies only) H53
spellingShingle	Indian economic growth misallocation public capital structural transformation two-sector OLG growth models unbalanced growth Social sciences and state - Asia (Asian studies only) H53 Chetan Ghate Gerhard Glomm Jialu Liu Streeter Sectoral Infrastructure Investments in an Unbalanced Growing Economy: The Case of Potential Growth in India
description	We construct a two-sector (agriculture and modern) overlapping generations growth model calibrated to India to study the effects of sectoral tax rates, sectoral infrastructure investments, and labor market frictions on potential growth in India. Our model is motivated by the idea that because misallocation depends on distortions, policies that reduce distortions raise potential growth. We show that the positive effect of a variety of policy reforms on potential growth depends on the extent to which public and private capital are complements or substitutes. We also show that funding more infrastructure investments in both sectors by raising labor income taxes in the agriculture sector raises potential growth.
format	article
author	Chetan Ghate Gerhard Glomm Jialu Liu Streeter
author_facet	Chetan Ghate Gerhard Glomm Jialu Liu Streeter
author_sort	Chetan Ghate
title	Sectoral Infrastructure Investments in an Unbalanced Growing Economy: The Case of Potential Growth in India
title_short	Sectoral Infrastructure Investments in an Unbalanced Growing Economy: The Case of Potential Growth in India
title_full	Sectoral Infrastructure Investments in an Unbalanced Growing Economy: The Case of Potential Growth in India
title_fullStr	Sectoral Infrastructure Investments in an Unbalanced Growing Economy: The Case of Potential Growth in India
title_full_unstemmed	Sectoral Infrastructure Investments in an Unbalanced Growing Economy: The Case of Potential Growth in India
title_sort	sectoral infrastructure investments in an unbalanced growing economy: the case of potential growth in india
publisher	World Scientific Publishing
publishDate	2016
url	https://doaj.org/article/afaeaf7b2a864338b6c5f5bfb179a2f0
work_keys_str_mv	AT chetanghate sectoralinfrastructureinvestmentsinanunbalancedgrowingeconomythecaseofpotentialgrowthinindia AT gerhardglomm sectoralinfrastructureinvestmentsinanunbalancedgrowingeconomythecaseofpotentialgrowthinindia AT jialuliustreeter sectoralinfrastructureinvestmentsinanunbalancedgrowingeconomythecaseofpotentialgrowthinindia
_version_	1718394532449484800

Sectoral Infrastructure Investments in an Unbalanced Growing Economy: The Case of Potential Growth in India

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