Has India Emerged? Business Cycle Facts from a Transitioning Economy

NIPFP Working Paper 88
[Link]

Chetan Ghate, Radhika Pandey, and Ila Patnaik
April 2011

Abstract

This paper presents a comprehensive set of stylised facts for business cycles in India from 1950-2009. We find that the nature of the business cycle has changed dramatically after India's liberalisation reforms in 1991. In particular, after the mid 1990s, the properties of India's business cycle has moved closer in key respects to select advanced countries. This is consistent with India's structural transformation from a pre-dominantly agricultural and planned developing economy to a more market based industrial-income economy. We also identify in what respects the behavior of the Indian business cycle is different from that of other advanced economies, and closer to that of other less developed economies. This is the first exercise of this kind to generate an exhaustive set of stylised facts for India using both annual and quarterly data.