An analysis of price and output behavior in the Indian economy: 1951–1973

This article attempts to analyze the behavior of prices — absolute as well as relative — and real outputs in the Indian economy over the period 1951–1973. This is done in a general equilibrium framework through specifying a macro-econometric model of the economy, emphasizing the supply constraints arising from the agricultural sector and the foreign sector. The model equations are estimated through two stage least squares estimation procedure, using annual data for the period 1951–1973. The impact of fluctuations in agricultural output and foreign exchange shortages on prices and outputs in the economy is explored within the model framework.