SEMINAR: Economics Research Seminar

Abstract

We use a new data set of district level data to estimate growth and convergence rates across the 575 Indian districts. We find that there is absolute divergence of income levels across districts. We then develop a simple extension of the standard convergence model that incorporates gravity model effects, to capture the remoteness of some districts from the major metropolitan centers. We find that the distance between a district and its closest metropolitan center is a very important factor in explaining differences in growth rates and income levels across districts.