Balance of Payments Constrained Growth Models: History and Overview

Anthony Thirlwall

Chapter 1 in Models of Balance of Payments Constrained Growth, 2012, pp 11-49 from Palgrave Macmillan

Abstract: Abstract Thiriwall’s 1979 balance of payments constrained growth model predicts that a country’s long-run growth of GDP can be approximated by the ratio of the growth of real exports to the income elasticity of demand for imports assuming negligible effects from real exchange rate movements.1 This chapter surveys developments of the model since then allowing for capital flows, interest payments on debt, terms of trade movements and disaggregation of the model by commodities and trading partners. Various tests of the model are discussed, and extensive lists of papers that have examined the model are presented.

Keywords: Gross Domestic Product; Current Account; Real Exchange Rate; Gross Domestic Product Growth; Export Growth (search for similar items in EconPapers)
Date: 2012
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Journal Article: Balance of payments constrained growth models: history and overview (2011)
Working Paper: Balance of Payments Constrained Growth Models: History and Overview (2011)
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DOI: 10.1057/9781137023957_2

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