Capital accumulation as a determinant of the rate of growth of the Thirlwall’s law

In this paper it is developed an extension of the external constraint growth model through the inclusion of the rate of capital accumulation and of the capital productivity growth rate as determinants of the imports growth rate in a first version, and of the imports and exports growth rates in a second version. In the first version, it is argued that, apart from the exports growth rate, the rate of capital accumulation and the capital productivity growth rate determine the growth rate consistent with a dynamic equilibrium of the trade balance.The effect of the rate of capital accumulation could be positive, null or negative, depending on whether the import requirements to carry it out are lower, equal or higher than the import substitution that is generated via the change in the production structure of the economies. Moreover, if capital productivity is both, partly exogenous and partly endogenous, the rate of capital accumulation could directly affect the growth rate consistent with a dynamic equilibrium of the trade balance, as well as indirectly through its further effect on the capital productivity growth rate. In the second version, it is shown that the international growth rate differences are not only due to different international specialization patterns, but also to international rates of capital accumulation differences.