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Operationalizing growth models

Author

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  • Baccaro, Lucio
  • Hadziabdic, Sinisa

Abstract

We present a new methodology for operationalizing growth models based on import-adjusted demand components. Applying the methodology to the latest release of OECD Input-Output Tables, we calculate the growth contributions of consumption, investment, government expenditures, and exports for sixty-six countries in the periods 1995 to 2007 and 2009 to 2018 and identify the respective growth models. We find that most countries are export-led or domestic demand-led and that other forms of growth are rare. Our results corroborate previous classifications in comparative political economy but also differ from them in significant respects. Importantly, our classification improves on previous ones by covering not just the advanced capitalist economies but also Central and Eastern European and South-East Asian and Latin American countries. In a further step, we illustrate how the new indicators can be used to analyze the "drivers" of different types of growth. This examination reveals that there is a clear trade-off between consumption- and export-led growth in advanced Western economies in the period 1995 to 2007 and a dependence of export-led growth in these countries on real exchange rate devaluation in the same period, while export complexity is not a significant predictor of export-led growth.

Suggested Citation

  • Baccaro, Lucio & Hadziabdic, Sinisa, 2022. "Operationalizing growth models," MPIfG Discussion Paper 22/6, Max Planck Institute for the Study of Societies.
    • Handle: RePEc:zbw:mpifgd:226
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    Cited by:

    1. Schedelik, Michael & Nölke, Andreas & May, Christian & Gomes, Alexandre, 2022. "Dependency revisited: Commodities, commodity-related capital flows and growth models in emerging economies," IPE Working Papers 201/2022, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    2. Berndt Keller, 2024. "Public sector employment relations: Germany in comparative perspective," European Journal of Industrial Relations, , vol. 30(1), pages 77-96, March.

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