 Convergence and Balance of Payments Constrained Growth: Is There a Puzzle?Carlos Garcimartín, José Antonio Alonso and Luis Rivas Chapter 7 in Models of Balance of Payments Constrained Growth, 2012, pp 189-216 from Palgrave Macmillan Abstract: Abstract One of the main implications of the neoclassical approach to growth is the existence of convergence across economies — although not necessarily to the same steady states — as a consequence of decreasing returns to capital. But, according to the balance of payments constrained growth theory as developed by Thirlwall, international convergence cannot be taken for granted. Although convergence can indeed occur in Thirlwall’s framework, the conditions that backward countries must fulfil to converge toward the leaders have some puzzling implications. In particular, non-price competitiveness must be higher in the less advanced countries than in the leading countries. This chapter is aimed at solving this puzzle by developing a model that attempts to reconcile the balance of payments constraint hypothesis with the notion of convergence. This model is employed to analyse economic growth in a sample of eleven developed nations over recent decades. Keywords: American Economic Review; Income Elasticity; Relative Prex; Convergence Process; Convergence Club (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-02395-7_8 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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