Economic growth and the long run balance of payments constraint in Spain
AbstractThe Thirlwall's Law test has been extensively employed in order to explain, from the demand side, the differences in rates of economic growth between countries. In this paper the test is put to an alternative use, namely to explain the uneven economic growth experienced in one single country, Spain, during two different periods, 1940-59 and 1960-85. Specifically, we seek to determine whether the liberalization of Spanish trade which preceded its integration into the EEC (1960-85) - insofar as this liberalization increased the possibilities of placing national production in the foreign market-might explain the higher rate of economic growth enjoyed during this period, as compared with the earlier period of economic autarky (1940-59). To that end, we estimate the corresponding export and import demand functions (using the Autoregressive Distributed Lags methodology and the cointegration approach of Johansen) and apply the McCornbie test. We conclude that the Spanish balance of payments, although determining the difference in potential growth between the two periods, did not function, strictu sensu, as a demand constraint. Rather, the responsibility for this lay with prices, which relaxed the limits imposed by foreign demand on growth during the autarky period and tightened them during the liberalization period.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.
Volume (Year): 8 (1999)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RJTE20
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Anthony P. Thirlwall, 2011.
"Balance of payments constrained growth models: history and overview,"
PSL Quarterly Review,
Economia civile, vol. 64(259), pages 307-351.
- A. P. Thirlwall, 2011. "Balance of Payments Constrained Growth Models: History and Overview," Studies in Economics 1111, Department of Economics, University of Kent.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.