 Growth and the external constraint: lessons from the Spanish caseApplied Economics, 1999, vol. 31, issue 2, 245-253 Abstract: The present article attempts to determine the role played by the balance-of-payments constraint on economic growth in Spain (1960-94), using cointegration techniques. This empirical exercise also serves to reveal some shortcomings in the usual procedures for estimating Thirlwall's Law. In particular, the Spanish case reveals how important it is to introduce a variable that expresses the competitiveness gains generated by improvements in quality of the goods and services into the export function. It also demonstrates the inadequate simplification entailed in an a priori exclusion of relative prices in external equilibrium equation. Not taking these two aspects into consideration may give rise to an erroneous confirmation of Thirlwall's Law, especially if, as in the Spanish case, both effects offset each other. Finally, if the aim is to analyse long-term relationships between variables, it would seem advisable to use procedures, such as cointegration, with variables in levels. Date: 1999 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:31:y:1999:i:2:p:245-253 Ordering information: This journal article can be ordered from Access Statistics for this article Applied Economics is currently edited by Anita Phillips More articles in Applied Economics from Taylor & Francis Journals |
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