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Balance Of Payments-Constrained Growth In Developing Countries: A Theoretical Perspective

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Author Info
Dillon Alleyne
Alfred A. Francis
Abstract

The paper clarifies some issues raised in the basic model of balance of payments-constrained growth due to Thirlwall and later extensions by Thirlwall and Hussain and Moreno-Brid. The model is also adapted to include both interest payments and net transfers. The latter variable has become very important to many developing countries and brings a new dimension to the analysis. Very importantly, net transfers are positively related to foreign income and negatively related to domestic income. Thus, the paper accounts for dynamic feedback effects, between net transfers, domestic and world income. Copyright © 2008 The Authors.

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Article provided by Blackwell Publishing in its journal Metroeconomica.

Volume (Year): 59 (2008)
Issue (Month): 2 (05)
Pages: 189-202
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Handle: RePEc:bla:metroe:v:59:y:2008:i:2:p:189-202

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