Natural, Effective and BOP-Constrained Rates of Growth: Adjustment Mechanisms and Closure Equations
Gabriel Porcile () and
Danilo Spinola ()
PSL Quarterly Review, 2018, vol. 71, issue 285, 139-160
The interaction between the effective (yE) and the natural rates of growth (yN) is a central partâ€”implicitly or explicitly addressedâ€”in all growth models. A stable equilibrium requires these two rates to converge; otherwise, one or more key macroeconomic variables would be rising or falling without bounds. In addition, the Keynesian tradition stressed the key role of the Balance-of-Payments constraint as a determinant of the equilibrium growth rate in the long run (yBP). This paper discusses alternative mechanisms through which these three growth rates converge and relates them to different theoretical approaches to the determinants of growth. With this objective, we extend the model suggested by Setterfield (2010) to include the evolution of the North-South technology gap and the pattern of specialization as key components of the Kaldorian productivity regime. The importance of the National System of Innovation in shaping the learning parameters and outcomes of the model is stressed, drawing from the Schumpeterian literature. A successful development strategy may emerge when the NSI enhances indigenous technological capabilities that allow the South economy to catch-up with the technological frontier.
Keywords: BOP-constrained growth models; Growth Models; Structural Change; Technological Capabilities. (search for similar items in EconPapers)
JEL-codes: E12 F43 O30 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed
Downloads: (external link)
Working Paper: Natural, effective and BOP-constrained rates of growth: Adjustment mechanisms and closure equations (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:psl:pslqrr:2018:22
Ordering information: This journal article can be ordered from
Access Statistics for this article
PSL Quarterly Review is currently edited by Alessandro Roncaglia and Carlo D'Ippoliti
More articles in PSL Quarterly Review from Economia civile
Bibliographic data for series maintained by Carlo D'Ippoliti ().