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Path dependence, distributive cycles and export capacity in a BoPC growth model

Marwil Dávila-Fernández and Serena Sordi ()

Department of Economics University of Siena from Department of Economics, University of Siena

Abstract: In a recent article, we extended Goodwin's (1967) model to study the interaction between distributive cycles and international trade for economies in which growth is balance-of-payments constrained (BoPC). Building on that set up, we investigate the implications of allowing exports to be a function of the capital stock. Using the existence part of the Hopf bifurcation theorem, we show that the resulting 3-dimensional system admits a limit cycle solution. We rely on numerical simulations to verify if fluctuations are persistent and bounded. Applying panel cointegration techniques, we also provide empirical evidence for a sample of 19 OECD countries between 1950-2014 that gives support to the formulation adopted for the exports function. Our main contribution lies in providing a simple base-line model to study distributive dynamics in open economies in line with recent developments in the BoPC growth literature.

Keywords: Growth cycle; Path dependence; Thirlwall?s law; Distributive cycles; Hopf bifurcation; Cointegration. (search for similar items in EconPapers)
JEL-codes: E12 E32 O40 (search for similar items in EconPapers)
Date: 2018-10
New Economics Papers: this item is included in nep-int and nep-mac
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Citations: View citations in EconPapers (2) Track citations by RSS feed

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Journal Article: Path dependence, distributive cycles and export capacity in a BoPC growth model (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:usi:wpaper:785

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