Shock persistence in a dual economy model of India
Tiffin, R. and Dawson, P. J. (2003) Shock persistence in a dual economy model of India. Journal of Development Studies, 40 (1). pp. 32-47. ISSN 0022-0388
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To link to this article DOI: 10.1080/00220380412331293657
This article examines shock persistence in agricultural and industrial output in India. Drawing on the dual economy literature, the linkages between the sectors through the terms of trade are emphasised. However different dual economy models make differing assumptions regarding the categorisation of variables as being either endogenous or exogenous and this distinction is crucial in explaining the pattern of shock persistence. Using annual data for 1955-95, our results show that shocks to both output series are permanent while those to the terms of trade are transient.