New Insights from a Structural Economic Dynamic Approach to Balance of Payments Constrained Growth

Ricardo Araujo

Chapter 8 in Models of Balance of Payments Constrained Growth, 2012, pp 217-238 from Palgrave Macmillan

Abstract: Abstract In this chapter it is shown that once-and-for-all variations at the level of the exchange rate can play an important role in the sectoral composition of the economy, and this fact has important implications in terms of a disaggregated version of Thirlwall’s Law even when the argument of the quantitative unimportance of relative price movements holds. The growth rate of a country is then shown to be affected by once-and-for-all movements at the level of nominal exchange rates, and the concept of a natural exchange rate is introduced.

Keywords: Exchange Rate; Real Exchange Rate; Price Elasticity; Income Elasticity; Nominal Exchange Rate (search for similar items in EconPapers)
Date: 2012
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Working Paper: New insights from a structural economic dynamic approach to balance of payments constrained growth (2011)
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DOI: 10.1057/9781137023957_9

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