EconPapers    
Economics at your fingertips  
 

International competitiveness in post-Keynesian growth theory: controversies and empirical evidence

Luciano Boggio and Laura Barbieri ()

Cambridge Journal of Economics, 2017, vol. 41, issue 1, 25-47

Abstract: A fundamental starting point for post-Keynesian theory concerning growth in open economies is succinctly expressed in the following statement by Kaldor: ‘[T]he main autonomous factor governing both the level and the rate of growth of effective demand of an industrial country…is the external demand for its exports: and the main factor governing the latter is international competitiveness, which in turn depends on the level of its industrial cost relatively to other industrial exporters’ (Kaldor, 1971, p. 7; italics added). Moreover, thanks to increasing returns in manufacturing, export expansion and international competitiveness would interact so as to create vicious or virtuous circles of cumulative causation. A few years later Kaldor, having found a positive correlation between the time changes of the main industrial countries’ relative manufacturing export shares and that of their relative unit costs—a correlation that became known as the ‘Kaldor paradox’—dismissed his original cumulative causation theory and adopted a version close to Harrod’s ‘foreign trade multiplier’. The purpose of this paper is to reaffirm the Kaldorian cumulative causation theory in its original version, by providing a firmer analytical basis and showing that, contrary to the ‘Kaldor paradox’, time changes in export performance must be ‘explained’ by levels rather than by changes in unit costs.

Keywords: International competitiveness; Post-Keynesian growth theory; Kaldor paradox; replicator equation (search for similar items in EconPapers)
JEL-codes: F43 O10 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (12) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1093/cje/bev067 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:cambje:v:41:y:2017:i:1:p:25-47.

Ordering information: This journal article can be ordered from
http://www.oup.co.uk/journals

Access Statistics for this article

Cambridge Journal of Economics is currently edited by Jacqui Lagrue

More articles in Cambridge Journal of Economics from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2022-09-24
Handle: RePEc:oup:cambje:v:41:y:2017:i:1:p:25-47.