EconPapers    
Economics at your fingertips  
 

Capital Accumulation, Structural Change and Real Exchange Rate in a Keynesian-Structuralist Growth Model

José Luís Oreiro (), Fabricio Missio () and Frederico Jayme Jr ()

Panoeconomicus, 2015, vol. 62, issue 2, 237-256

Abstract: The aim of this paper is to show at theoretical level that maintaining a competitive real exchange rate positively affects the economic growth of developing countries by means of a Keynesian-Structuralist model that combines elements of Kaleckian growth models with the balance of payments constrained growth models pioneered developed by Thirlwall. In this setting, the level of real exchange rate is capable, due to its effect over capital accumulation, to induce a structural change in the economy, making endogenous income elasticities of exports and imports. For reasonable parameter values it is shown that in steady-state growth there is two long-run equilibrium values for real exchange rate, one that corresponds to an under-valued currency and another that corresponds to an over-valued currency. If monetary authorities run exchange rate policy in order to target a competitive level for real exchange rate, than under-valued equilibrium is stable and the economy will show a high growth rate in the long-run.

Keywords: Exchange rate; Economic growth; Structural change (search for similar items in EconPapers)
JEL-codes: O40 O41 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://www.panoeconomicus.rs/casopis/2015_2/06%20J ... G.%20Jayme%20Jr..pdf

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:voj:journl:v:62:y:2015:i:2:p:237-256

Access Statistics for this article

Panoeconomicus is currently edited by Kosta Josifidis

More articles in Panoeconomicus from Savez ekonomista Vojvodine, Novi Sad, Serbia
Bibliographic data for series maintained by Ivana Horvat ( this e-mail address is bad, please contact ).

 
Page updated 2022-09-21
Handle: RePEc:voj:journl:v:62:y:2015:i:2:p:237-256