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Balance of Payments Constrained Growth and Developing Countries: An examination of Thirlwall's hypothesis

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  • Jonathan Perraton

Abstract

Thirlwall's hypothesis of balance of payments constrained growth has been widely tested for developed countries, but much less for developing countries. Further, previous tests have used dated estimates derived using non-robust econometric techniques. After discussing the conditions under which Thirlwall's hypothesis would be valid and the econometric issues involved, this study reports error correction estimates of import and export demand functions for a large sample of developing countries. Deriving the long run income elasticities of demand from these functions, the study reports tests for different specifications of Thirlwall's hypothesis on this sample and finds some support for it.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/713673169
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal International Review of Applied Economics.

Volume (Year): 17 (2003)
Issue (Month): 1 ()
Pages: 1-22

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Handle: RePEc:taf:irapec:v:17:y:2003:i:1:p:1-22

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  1. Mody, Ashoka & Yilmaz, Kamil & DEC, 1994. "Is there persistence in the growth of manufactured exports? Evidence from newly industrializing countries," Policy Research Working Paper Series 1276, The World Bank.
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  12. Krugman, Paul, 1989. "Differences in income elasticities and trends in real exchange rates," European Economic Review, Elsevier, vol. 33(5), pages 1031-1046, May.
  13. J. S. L. McCombie & A. P. Thirlwall, 1997. "The Dynamic Harrod Foreign Trade Multiplier and the Demand-orientated Approach to Economic Growth: an Evaluation," International Review of Applied Economics, Taylor & Francis Journals, vol. 11(1), pages 5-26.
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  15. Muscatelli, Vito Antonio & Stevenson, Andrew A & Montagna, Catia, 1995. "Modeling Aggregate Manufactured Exports for Some Asian Newly Industrialized Economies," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 147-55, February.
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