Structural Breaks, Growth Trends, and Inflation Dynamics: A Comparative Analysis of India and Assam
Economic growth and inflation are two fundamental macroeconomic indicators that influence policy decisions and overall economic stability. This study examines the trend growth rates of Gross Domestic Product (GDP) and Gross State Domestic Product (GSDP) at constant prices while incorporating structural breaks using the Bai and Perron (1998) methodology. Additionally, the study evaluates quarterly and annual inflation rates using both the GDP/GSDP deflator and the Consumer Price Index (CPI) for India and Assam. The analysis covers the latest available data, focusing on:
- Trend growth rates of GDP and GSDP, detecting structural shifts and computing period-wise growth using the Boyce (1986) kinked exponential growth method.
- Quarterly inflation trends, derived from both the GDP deflator and CPI, capturing short- term price fluctuations.
- Annual headline and core inflation rates, where core inflation is computed by excluding food and fuel component. By analyzing these key economic indicators, this study aims to provide insights into India’s macroeconomic performance and compare it with Assam, highlighting policy implications for future economic planning.