India and the Global Economy

Vast Potential But Also Difficult Challenges

wilson By Beth Anne Wilson and Geoffrey N. Keim

Beth Anne Wilson is a senior economist in the International Finance Division of the Federal Reserve Board. She currently covers India and Korea and has followed emerging market issues for several years. During 2003-2004, she was senior economist for International Finance at the Council of Economic Advisers, and earlier work at the Board focused on U.S. labor markets. She has an active research agenda in areas including wage behavior, macroeconomic volatility, and finance. She received her Ph.D. in economics from the Massachusetts Institute of Technology in 1995.

keim Geoffrey Keim is a research assistant in the International Finance division of the Federal Reserve Board. He currently covers Russia and assists in coverage for India and Korea. Keim has also participated in research pertaining to bankruptcy processes. He received a B.A. degree in Economics and Business in 2004 from Ursinus College.

India’s booming knowledge-based sectors demonstrate the power of globalization to transform developing economies. For India, however, these industries are just part of its contribution to the global economy. For a more nuanced picture of India’s international economic position, this paper places India in international and historical context, examines its links to the world through trade, labor, and capital, and outlines some critical challenges facing the country. What emerges is a more complex picture of India -- a nation with far more to offer than skilled programmers but which must address problems of poverty, infrastructure, and governance to achieve its potential.

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