The elasticity in the balance-of-payments constrained growth model: contributions to debate
DOI:
https://doi.org/10.1590/0101-4161201545233ffoKeywords:
Growth, Balance of payments, Evolutionism, InstitutionalismAbstract
The aim of this paper is analyze the elasticity in balance of payments constrained models on Keynesian-structuralist tradition. Precisely, we intend to scrutinize why income demand elasticity of imports and exports are different between emerging and developed countries. We start from the benchmark Thirlwal (1979)'s model, emphasizing the role of income elasticities on growth among countries. Besides, we show the theoretical and empirical aspects of demand-led models highlighting why industrialization in periphery does not solve the external constraint on growth in several periphery countries. Finally, we present theoretical elements of post Keynesian, evolutionary and institucionalist traditions that contribute to the understanding of growth in developing countries. Conclusions highlight that elasticities are endogenous and depend on the structural heterogeneity of those economies.
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