Trade and Convergence: Empirical Evidence from BRICS Countries

The present article attempts to analyse trade and per capita income convergence for the BRICS countries. The effects of economic bloc formation on their trade and income distribution or convergence (divergence) among the countries have been analysed. To observe the effect of trade on convergence rates, intra-trade group, single difference approach and panel unit roots tests have been used. The convergence measure is estimated between BRICS countries and their major trading partners from post-trade liberalization period. The study revealed that BRICS countries converged over the study period. However, the evidence on post-BRICS economic bloc formation shows an insignificant relationship. The results of the analysis of post-trade liberalization of BRICS countries vary among the BRICS countries. Further, panel unit roots test results confirm that conditional convergence is taking place within BRICS bloc and all export-based groups except for Indian economy and import-based groups. Besides, absolute convergence has been confirmed for all the groups. Thus, the study suggests the need of BRICS countries to actively engage in trade and investment activities.

Growth and Convergence of Social Sectors’ Expenditure in Indian States: Upshots from Neoclassical Growth and Panel Unit Roots Models

In a world of having large part suffering from the inadequacies of basic needs and inter-class and inter-regional income disparities, investing upon the development of different social sectors from the state exchequers have been one of the top agendas of the policymakers. It is not a different issue for the states and provinces of the developing countries like India. Besides having positive roles on economic betterment, spending on social expenditures sometimes work in favour of the ruling political parties to gain confidence from the voters. The states thus compete in this area. Under this background, the present study attempts to examine whether the states of India are converging in social sector’s expenditure for the period 1980–81 to 2017–18. Applying the neoclassical growth and panel unit roots models the study observes unambiguously that there are absolute and conditional β convergence and σ convergence in per capita social expenditure among the states. JEL Classification: H72, O470, C23, O530