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The Rise and Fall of India's Relative Investment Price: A Tale of Policy Error and Reform

Version
1
Resource Type
Dataset
Creator
  • Johri, Alok (McMaster University)
Publication Date
2020-07-17
Funding Reference
  • Social Science and Humanities Research Council of Canada
    • Award Number: 435-2016-0708
Description
  • Abstract

    India's relative price of investment rose 44% from 1981 to 1991 and fell 26% from 1991 to 2006. We build a simple DGE model calibrated to Indian data in order to explore the impact of capital import substitution policies and their reform post-1991, in accounting for this rise and fall. Our model delivers a 23% rise before reform and a 31% fall thereafter. GDP per effective labor was 3% lower in 1991 compared to 1981 due to import restrictions on capital goods. Their removal and a 71 percentage point reduction in tariff rates raised GDP per effective labor permanently by 20%.
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Relations
  • Is version of
    DOI: 10.3886/E120319

Update Metadata: 2020-07-17 | Issue Number: 1 | Registration Date: 2020-07-17

Johri, Alok (2020): The Rise and Fall of India's Relative Investment Price: A Tale of Policy Error and Reform. Version: 1. ICPSR - Interuniversity Consortium for Political and Social Research. Dataset. https://doi.org/10.3886/E120319V1