A Quantitative Analysis Ashok Kumar Lahiri Srinivasa Madhur Dipankar Purkayastha Prannoy Roy This paper attempts an empirical investigation of the factors affecting output, prices, wages and raw material costs in the factory sector of Indian industry. It forms part of a larger system of equations which together constitute a macro-econometric model of the Indian economy The focus of the study is on the price-quantity adjustment mechanism in Indian industry with specific attention to the role of government policies and international trade in the determination of output and prices. Since there has been considerable diversity in the behaviour of the different constituents of the industrial sector in India, the model is constructed in a disaggregated four-sector framework classified on the basis of end-use: consumer goods, capital goods, basic goods and intermediate goods.
