Of course, everyone knows that the Indian development experience, certainly in the last 30-35 years, has been driven by services, and that’s fairly special. The other way of understanding this precocious model is that in some ways India is trying to grow and develop not by worshipping or deifying its comparative advantage but by defying it. We have a lot of unskilled labour but we are not using it; we are using much more of our skilled labour.
I echo Alex Tabarrok’s recommendation to read the whole thing.
Unfortunately I couldn’t get beyond 10 mins of that discussion. Claiming special qualities to Indian macroeconomic indices seemed detached and disturbing. Economists need to grasp that it’s real individuals attempting to adapt to uniquely Indian constraints imposed by its own government.
Indian travails are self-inflicted by its own bureaucracy, there are all sorts of restrictions on private property rights. It’s a micro-economic issue, and caused by government institutions.
Let’s comprehend what’s happening at the ground before interpreting precociousness of Indian model.
Imposing uniquely discretionary rule-by-law would cause micro-adaptations to overcome these unique hurdles. Indians are not *special*, nor is the model to be celebrated. It’s a dreadful train wreck.
I hope the discussion progressed into some substantial micro-economic causal analysis and did not dwell around employing macro textbook interpretations.
India has one of other major difference from the BRIC and developed nations: They have an increasing population so they are more endangered with inflation (ruppee falling again) than be a Demographic Liquidity Trap. (ie Japan since 1994 or so.)