Analysis of the growth in Indian economy using the the Austrian business cycle theory

Abstract

This study seeks to address the question of sustainability of the current boom in India based on the Austrian Business Cycle Theory. The report gives a comprehensive description of the theory involved in the analysis before the analysis itself is presented. The CCS uses the Garrisonian model of business cycle theory which incorporates both Austrian as well as non-Austrian constructs to explain the growth in an economy. From our analysis we have come to the inference that Indian economy after recovering from the recession which ended in the fiscal year 2001-02, has been growing primarily because of credit expansion and therefore, the growth path is unsustainable