Citations (2)



The Remarkable Durability of Thirlwall’s Law

Mark Setterfield

New School for Social Research; Trinity College

June 1, 2011

Trinity College Department of Economics Working Paper No. 11-05

This paper contemplates the robustness of Thirlwall’s Law, a parsimonious expression that relates long run equilibrium growth in any one region to the product of world income growth and the ratio of the income elasticities of demand for exports and imports. Various extensions of the balance-of-payments-constrained growth model from which Thirlwall’s Law is derived are contemplated. In each case, Thirlwall’s Law is shown to reassert itself as a good approximation of the equilibrium growth rate. It is hypothesized that this robustness helps explain the widespread empirical success of Thirlwall’s Law.

Number of Pages in PDF File: 38

Keywords: Thirlwall’s Law, Balance-of-Payments-Constrained Growth, Export-Led Growth, Demand-Led Growth, Natural Rate of Growth

JEL Classification: O41, E12

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Date posted: June 3, 2011  

Suggested Citation

Setterfield , Mark, The Remarkable Durability of Thirlwall’s Law (June 1, 2011). Trinity College Department of Economics Working Paper No. 11-05. Available at SSRN: http://ssrn.com/abstract=1856696 or http://dx.doi.org/10.2139/ssrn.1856696

Contact Information

Mark Setterfield (Contact Author)
New School for Social Research ( email )
6 East 16th Street
New York, NY 10003
United States
Trinity College ( email )
300 Summit Street
Department of Economics
Hartford, CT 06106
United States
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