IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v29y1997i10p1343-1351.html
   My bibliography  Save this article

On the dynamics of balance of payments constrained growth

Author

Listed:
  • H. Sonmez Atesoglu
  • Donald Dutkowsky

Abstract

This paper assesses the dynamic behaviour of policies for resolving trade deficits. We extend the Thirlwall-based model by introducing an equation for setting current account policy. Steady-state solutions implying current account equilibrium emerge under autonomous spending contraction, exchange rate develuation, export expansion, and import reduction. Stability holds with plausible restrictions. simulations based upon the United States reveal that autonomous spending, import, and export policies behave similarly in correcting trade deficits. Exchange rate devaluation generates considerably slower adjustment. Corresponding output growth paths are also examined. The study formally incorporates dynamics into the Thirlwall approach for analysing balance of paymnets constrained growth.

Suggested Citation

  • H. Sonmez Atesoglu & Donald Dutkowsky, 1997. "On the dynamics of balance of payments constrained growth," Applied Economics, Taylor & Francis Journals, vol. 29(10), pages 1343-1351.
    • Handle: RePEc:taf:applec:v:29:y:1997:i:10:p:1343-1351
    DOI: 10.1080/00036849700000025
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00036849700000025
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036849700000025?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. J. S. L. McCombie, 1993. "Economic Growth, Trade Interlinkages, and the Balance-of-Payments Constraint," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 15(4), pages 471-505, July.
    2. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    3. A. P. Thirlwall, 2015. "A Model of Regional Growth Rate Differences on Kaldorian Lines," Palgrave Studies in the History of Economic Thought, in: Essays on Keynesian and Kaldorian Economics, chapter 12, pages 286-301, Palgrave Macmillan.
    4. J. S. L. McCombie & A. P. Thirlwall, 1994. "Economic Growth and the Balance-of-Payments Constraint," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-23121-8, March.
    5. Rao, B Bhaskara, 1992. "Some Further Evidence on the Policy Ineffectiveness Proposition," Economic Journal, Royal Economic Society, vol. 102(414), pages 1244-1250, September.
    6. A. P. Thirlwall, 1991. "Professor Krugman’s 45-Degree Rule," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 14(1), pages 23-28, September.
    7. Thirlwall, Anthony P & Hussain, Mohammed Nureldin, 1982. "The Balance of Payments Constraint, Capital Flows and Growth Rate Differences between Developing Countries," Oxford Economic Papers, Oxford University Press, vol. 34(3), pages 498-510, November.
    8. Kaldor, Nicholas, 1970. "The Case for Regional Policies," Scottish Journal of Political Economy, Scottish Economic Society, vol. 17(3), pages 337-348, November.
    9. Charles I. Plosser, 1992. "The search for growth," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 57-86.
    10. A. P. Thirlwall, 1982. "The Harrod Trade Multiplier And The Importance Of Export-Led Growth," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 1(1), pages 1-21.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Frederico Gonzaga Jayme Jr, 2001. "Notes on trade and growth," Textos para Discussão Cedeplar-UFMG td166, Cedeplar, Universidade Federal de Minas Gerais.
    2. Robert A. Blecker, 2009. "Long-Run Growth in Open Economies: Export-Led Cumulative Causation or a Balance-of-Payments Constraint?," Working Papers 2009-23, American University, Department of Economics.
    3. A.P. Thirlwall, 2018. "Una vita nell’economia," Moneta e Credito, Economia civile, vol. 71(283), pages 179-210.
    4. Anthony Philip Thirlwall, 2012. "Balance of Payments Constrained Growth Models: History and Overview," Palgrave Macmillan Books, in: Elias Soukiazis & Pedro A. Cerqueira (ed.), Models of Balance of Payments Constrained Growth, chapter 1, pages 11-49, Palgrave Macmillan.
    5. Frederico Gonzaga Jayme Junior, 2001. "External debt sustainability: empirical evidence in Brazil," Textos para Discussão Cedeplar-UFMG td154, Cedeplar, Universidade Federal de Minas Gerais.
    6. Carton, Christine, 2007. "Un modèle de croissance cumulative étendu á l’éducation: une validation empirique pour la région asiatique [A model of cumulative growth extended to education: an empirical assessment for the Asian," MPRA Paper 20549, University Library of Munich, Germany.
    7. Gustavo Britto & João Prates Romero, 2011. "Modelos kaldorianos de crescimento e suas extensões contemporâneas," Textos para Discussão Cedeplar-UFMG 449, Cedeplar, Universidade Federal de Minas Gerais, revised Jul 2013.
    8. Salvatore D'Acunto & Sergio Destefanis & Marco Musella, 2004. "Exports, Supply Constraints and Growth: An Investigation using Regional Data," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(2), pages 167-189.
    9. Araujo, Ricardo Azevedo & Teixeira, Joanilio Rodolpho, 2021. "An appraisal of neo-Kaldorian theories from a structural economic dynamics perspective," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 247-255.
    10. A. P. Thirlwall, 2013. "Economic Growth in an Open Developing Economy," Books, Edward Elgar Publishing, number 15208.
    11. Ricardo Azevedo Araujo & Gilberto Tadeu Lima, 2007. "A structural economic dynamics approach to balance-of-payments-constrained growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 31(5), pages 755-774, September.
    12. Marcos Tostes Lamonica & Carmem Aparecida Feijo, 2007. "Crescimento E Industrialização No Brasil: As Lições Das Leis De Kaldor," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 053, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    13. Elias Soukiazis & Micaela Antunes & Ioannis Kostakis, 2018. "The Greek economy under the twin-deficit pressure: a demand orientated growth approach," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(2), pages 215-236, March.
    14. Robert A. Blecker, 2022. "New advances and controversies in the framework of balance‐of‐payments‐constrained growth," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 429-467, April.
    15. Elias Soukiazis & Micaela Antunes & Pedro André Cerqueira, 2017. "Growth adjustments through non-price competitiveness and productivity. A cumulative causation approach," CeBER Working Papers 2017-01, Centre for Business and Economics Research (CeBER), University of Coimbra.
    16. Christine Carton Madura, 2009. "Mecanismos kaldorianos del crecimiento regional: Aplicación empírica al caso del ALADI (1980-2007)," Economic Analysis Working Papers (2002-2010). Atlantic Review of Economics (2011-2016), Colexio de Economistas de A Coruña, Spain and Fundación Una Galicia Moderna, vol. 8, pages 1-24, May.
    17. Matias Vernengo & Louis-Philippe Rochon, 2001. "Kaldor and Robinson on money and growth," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 8(1), pages 75-103.
    18. Bart Los & Bart Verspagen, 2006. "The Evolution Of Productivity Gaps And Specialization Patterns," Metroeconomica, Wiley Blackwell, vol. 57(4), pages 464-493, November.
    19. Juan Carlos Moreno-Brid & Lorenzo Nalin & Edgar Perez-Medina, 2023. "Current External Challenges to the Economic Expansion of Emerging Markets," Working Papers Series inetwp201, Institute for New Economic Thinking.
    20. Pugno, Maurizio, 1996. "A Kaldorian model of economic growth with labour shortage and major technical changes," Structural Change and Economic Dynamics, Elsevier, vol. 7(4), pages 429-449, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:29:y:1997:i:10:p:1343-1351. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.