Convergence across Indian states : A re-evaluation

In this paper, we examine the growth convergence hypothesis within a developing country. Across Indian states, income dispersion has widened in recent years. Some new methods that are used by many researchers for studies across countries or across U.S. regions are applied, and we find that almost all income sequences in the Indian states have unit roots. This result implies that, although India achieved relatively high growth in the 1990s, per capita income across states tended to diverge, and that income dynamics within a developing country may differ from those within a developed country.