Nowcasting Economic Growth in India: The Role of Rainfall
“Nowcasting” uses high frequency data to generate estimates of GDP growth. It helps policy makers and market participants overcome decision-making difficulties when official statistics on key variables like economic growth are delayed. This paper nowcasts quarterly GDP growth in India by developing an econometric framework specific to the country’s economy. It finds that rainfall has high predictive content for GDP growth, although this predictive content has declined slightly over time. It also finds that structural and stabilization policies enacted since the 1990s have increased the resilience of India to economic shocks.
- A Brief Review of the Literature
- Trend of Indian Gross Domestic Product Growth
- A Model of Rainfall and Gross Domestic Product Growth
- Nowcasting Framework
- Empirical Results