The Remarkable Durability of Thirlwall’s Law

Mark Setterfield

No 1105, Working Papers from Trinity College, Department of Economics

Abstract: This paper contemplates the robustness of Thirlwall’s Law, a parsimonious expression that relates long run equilibrium growth in any one region to the product of world income growth and the ratio of the income elasticities of demand for exports and imports. Various extensions of the balance-of-payments-constrained growth model from which Thirlwall’s Law is derived are contemplated. In each case, Thirlwall’s Law is shown to reassert itself as a good approximation of the equilibrium growth rate. It is hypothesized that this robustness helps explain the widespread empirical success of Thirlwall’s Law.

Keywords: Thirlwall’s law; balance-of-payments-constrained growth; export-led growth; demand-led growth; natural rate of growth. (search for similar items in EconPapers)
JEL-codes: E12 O41 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2011-06
New Economics Papers: this item is included in nep-fdg and nep-pke
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Citations: View citations in EconPapers (38)

Downloads: (external link)
http://www3.trincoll.edu/repec/WorkingPapers2011/wp11-05.pdf First version, 2011 (application/pdf)

Related works:
Chapter: The Remarkable Durability of Thirlwall’s Law (2012)
Journal Article: The remarkable durability of Thirlwall's Law (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:tri:wpaper:1105

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