The Nature of Indian Inequality Increase after Liberalization
19 Pages Posted: 4 Jan 2007
Date Written: 2006
Abstract
This paper looks at the implications of the liberalization process for the magnitude and nature of inequality in India and its possible ramifications for social harmony. Our discussion implies that the increase in household based rural and urban inequality for monthly consumption expenditure at the national level is not the result of inequality increasing within communities but is the consequence of widening inequality across communities. With regard to social unrest the distance factor among unequal entities does come into play and therefore the current mechanism of inequality increase at the household level should not pose grave dangers. Second, the impact of liberalization on consumption inequality overstates inequality in the income space as liberalization has increased the marginal propensities to consume of rich states and rich individuals. Thus, while liberalization has led to acceleration in the increase in inequality of consumption expenditure, the opposite is true of income.
Keywords: inequality, per capita income, expenditure
JEL Classification: A10, D63
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Misallocation and Manufacturing TFP in China and India
By Chang-tai Hsieh and Peter J. Klenow
-
Misallocation and Manufacturing TFP in China and India
By Chang-tai Hsieh and Peter J. Klenow
-
Growth Theory Through the Lens of Development Economics
By Abhijit V. Banerjee and Esther Duflo
-
Policy Distortions and Aggregate Productivity with Heterogeneous Plants
By Diego Restuccia and Richard Rogerson
-
The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India
By Philippe Aghion, Robin Burgess, ...
-
The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India
By Philippe Aghion, Robin Burgess, ...
-
The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India
By Philippe Aghion, Stephen J. Redding, ...
-
The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India
By Philippe Aghion, Robin Burgess, ...
-
Macroeconomic Implications of Size-Dependent Policies
By Nezih Guner, Gustavo Ventura, ...
-
By Zheng Michael Song, Kjetil Storesletten, ...