Structural changes, cointegration and the empirics of Thirlwall's law
Abstract
Thirlwall's law establishes a relation between the long-run growth rate, the growth of exports and the long-run income elasticity of imports. The estimation of this parameter requires cointegration techniques, which in turn require a large span of data, thus exposing the estimates to risks of structural changes. While this problem has been recognized in the literature, the evidence produced is still partial, being concerned with a very limited number of countries, and in some respects unsatisfactory. In this article we fill this gap by assessing Thirlwall's empirical regularity on a sample of 22 Organization for Economic Cooperation and Development (OECD) countries using econometric techniques that allow for the presence of a shift of unknown date in the long-run parameters. The results are generally supportive of Thirlwall's hypothesis and allow us to reconcile and qualify the evidence provided in the existing literature.Download Info
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Bibliographic Info
Article provided by Taylor and Francis Journals in its journal Applied Economics.
Volume (Year): 42 (2010)
Issue (Month): 10 ()
Pages: 1315-1329
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Lanzafame, Matteo, 2011. "The balance of payments constrained growth rate and the natural rate of growth: new empirical evidence," MPRA Paper 33130, University Library of Munich, Germany.
- Halicioglu, Ferda, 2012.
"Balance-of-Payments Constrained Growth: the Case of Turkey,"
MPRA Paper
41791, University Library of Munich, Germany.
- Ferda Halicioglu, 2012. "Balance-of-payments-constrained growth: the case of Turkey," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 35(1), pages 65-78, October.
- Elias Soukiazis & Pedro Cerqueira & Micaela Antunes, 2012. "Causes of the Decline of Economic Growth in Italy and the Responsibility of EURO. A Balance-of-Payments Approach," GEMF Working Papers 2012-03, GEMF - Faculdade de Economia, Universidade de Coimbra.
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