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Balance-of-Payments constrained growth dynamics: An empirical investigation

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  • Kvedaras, Virmantas
  • Garcimartín, Carlos
  • Astudillo, Jhonatan

Abstract

•The dynamics of the BOP constrained growth model are analyzed.•Future growth is forecasted by means of a long-run component consistent with external equilibrium and a cyclical term.•Whenever the cyclical term, driven by current account deficits, is substantial, it conditions future growth rates.•Our findings are in sharp contrast with the predictions of forward-looking rational expectations models.

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  • Kvedaras, Virmantas & Garcimartín, Carlos & Astudillo, Jhonatan, 2020. "Balance-of-Payments constrained growth dynamics: An empirical investigation," Economic Modelling, Elsevier, vol. 89(C), pages 232-244.
    • Handle: RePEc:eee:ecmode:v:89:y:2020:i:c:p:232-244
    DOI: 10.1016/j.econmod.2019.10.026
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