Balance of Payments Constrained Growth Models: History and Overview

PSL Quarterly Review, Vol. 64, No. 259, pp. 307-351, 2011

45 Pages Posted: 2 May 2012

See all articles by A. P. Thirlwall

A. P. Thirlwall

University of Kent - Canterbury Campus

Date Written: December 15, 2011

Abstract

Thirlwall’s 1979 balance of payments constrained growth model predicts that a country’s long run growth of GDP can be approximated by the ratio of the growth of real exports to the income elasticity of demand for imports assuming negligible effects from real exchange rate movements. The paper surveys developments of the model since then, allowing for capital flows, interest payments on debt, terms of trade movements, and disaggregation of the model by commodities and trading partners. Various tests of the model are discussed, and an extensive list of papers that have examined the model is presented.

Keywords: balance of payments, growth, Thirlwall’s law, dynamic Harrod multiplier

JEL Classification: F32, F40, F43

Suggested Citation

Thirlwall, A. P., Balance of Payments Constrained Growth Models: History and Overview (December 15, 2011). PSL Quarterly Review, Vol. 64, No. 259, pp. 307-351, 2011. Available at SSRN: https://ssrn.com/abstract=2049740

A. P. Thirlwall (Contact Author)

University of Kent - Canterbury Campus ( email )

Keynes College
Canterbury, Kent CT2 7NP
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
644
Abstract Views
2,088
rank
39,881
PlumX Metrics