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Remittances, Regional Integration, and Balance of Payments Constrained Growth in El Salvador

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  • Luis Rene Caceres

Abstract

This paper presents a reworking of Thirlwall's model of economic growth restricted by the balance of payments for El Salvador, taking into account its trade flows with the other Central American countries and its remittances. The results indicate that there is a restriction on the economic growth of this country determined by the economic growth of the other countries of the subregion. It is also found that the role of remittances in alleviating external restriction is low. Evidence is presented that this restriction can be overcome by increasing the quality of education. The work concludes by pointing out the urgency for Central American countries to substantially improve the quality of their educational systems, as a means of increasing their economic dynamism.

Suggested Citation

  • Luis Rene Caceres, 2021. "Remittances, Regional Integration, and Balance of Payments Constrained Growth in El Salvador," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(3), pages 1-50, March.
    • Handle: RePEc:ibn:ijefaa:v:13:y:2021:i:3:p:50
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    References listed on IDEAS

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    2. Jamison, Eliot A. & Jamison, Dean T. & Hanushek, Eric A., 2007. "The effects of education quality on income growth and mortality decline," Economics of Education Review, Elsevier, vol. 26(6), pages 771-788, December.
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    Cited by:

    1. Luis Rene Caceres, 2021. "Nafta and Mexico’s Economic Growth from a Gender Perspective," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(12), pages 1-90, December.

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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