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CAUSES OF SLOW GROWTH:
A recent empirical study seeks to explain statistically the variations in inter-country growth rates. The global pattern of growth is shown to depend on four factors: (i) initial conditions, (ii) policy variable, (iii) demographic dynamics, and (iv) resources and geography. Table 2.7 below statistically measures the contribution of each of these factors in the variation of growth between India and that in East and South-East Asia.
Whereas India scored positively over East and South-East Asia in terms of initial GDP per person, its growth has suffered because of the adverse conditions relating to the following: (i) schooling, (ii) Government saving rate, (iii) openness, (iv) institutional quality, (v) life expectance, (vi) growth in working age population, (vii) growth in total population, and (viii) ratio of coastline distance to land area.
FACTORS AFFECTING FLEXIBLE EXCHANGE RATE: Shifts in the demand and supply schedules for foreign currency take place on accountof a number of factors. Some of them are enumerat
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