IDEAS home Printed from https://ideas.repec.org/p/lev/wrkpap/wp_675.html
   My bibliography  Save this paper

The Rise and Fall of Export-led Growth

Author

Listed:
  • Thomas I. Palley

Abstract

This paper traces the rise of export-led growth as a development paradigm and argues that it is exhausted owing to changed conditions in emerging market (EM) and developed economies. The global economy needs a recalibration that facilitates a new paradigm of domestic demand-led growth. Globalization has so diversified global economic activity that no country or region can act as the lone locomotive of global growth. Political reasoning suggests that EM countries are not likely to abandon export-led growth, nor will the international community implement the international arrangements needed for successful domestic demand-led growth. Consequently, the global economy likely faces asymmetric stagnation.

Suggested Citation

  • Thomas I. Palley, 2011. "The Rise and Fall of Export-led Growth," Economics Working Paper Archive wp_675, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_675
    as

    Download full text from publisher

    File URL: http://www.levyinstitute.org/pubs/wp_675.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sapsford, David & Singer, Hans, 1998. "The IMF, the world bank and commodity prices: A case of shifting sands?," World Development, Elsevier, vol. 26(9), pages 1653-1660, September.
    2. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    3. Kaplinsky, Raphael, 1993. "Export Processing Zones in the Dominican Republic: Transforming manufactures into commodities," World Development, Elsevier, vol. 21(11), pages 1851-1865, November.
    4. Wolfgang F. Stolper & Paul A. Samuelson, 1941. "Protection and Real Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 9(1), pages 58-73.
    5. Robert A. Blecker & Arslan Razmi, 2010. "Export-led Growth, Real Exchange Rates and the Fallacy of Composition," Chapters, in: Mark Setterfield (ed.), Handbook of Alternative Theories of Economic Growth, chapter 19, Edward Elgar Publishing.
    6. Grossman, Gene M. & Helpman, Elhanan, 1991. "Trade, knowledge spillovers, and growth," European Economic Review, Elsevier, vol. 35(2-3), pages 517-526, April.
    7. Mark Setterfield (ed.), 2010. "Handbook of Alternative Theories of Economic Growth," Books, Edward Elgar Publishing, number 12814.
    8. R. G. Lipsey & Kelvin Lancaster, 1956. "The General Theory of Second Best," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 24(1), pages 11-32.
    9. Kalina Manova & Zhiwei Zhang, 2008. "China's exporters and importers: firms, products, and trade partners," Working Paper Series 2008-28, Federal Reserve Bank of San Francisco.
    10. Sarkar, Prabirjit & Singer, H. W., 1991. "Manufactured exports of developing countries and their terms of trade since 1965," World Development, Elsevier, vol. 19(4), pages 333-340, April.
    11. Brewer, Anthony, 1985. "Trade with fixed real wages and mobile capital," Journal of International Economics, Elsevier, vol. 18(1-2), pages 177-186, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ambreen FATEMAH & Abdul QAYYUM, 2018. "Modeling the impact of exports on the economic growth of Pakistan," Turkish Economic Review, KSP Journals, vol. 5(1), pages 56-64, March.
    2. Davit Belkania, 2020. "Export Structure and Economic Performance in Transition Economies," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 476-490.
    3. Bibhuti Ranjan Mishra, 2020. "Role of External and Domestic Demand in Economic Growth: A Study of BRICS Countries," Global Business Review, International Management Institute, vol. 21(2), pages 547-566, April.
    4. Solikin M. Juhro, 2014. "THE ROLE OF THE CENTRAL BANK IN PROMOTING SUSTAINABLE GROWTH: Perspectives on the Implementation of Flexible ITF in Indonesia," Working Papers WP/17/2014, Bank Indonesia.
    5. Sigit Setiawan, 2017. "Middle Income Trap and Infrastructure issues In Indonesia: A Strategic Perspective," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 42-48.
    6. repec:grt:wpegrt:2014-21 is not listed on IDEAS
    7. Chengete Chakamera & Noleen M. Pisa, 2021. "Associations Between Logistics and Economic Growth in Africa," South African Journal of Economics, Economic Society of South Africa, vol. 89(3), pages 417-438, September.
    8. Hany H. MAKHLOUF, 2016. "The Rewards and Challenges of Export-Led Strategies," Journal of Economics and Political Economy, KSP Journals, vol. 3(3), pages 440-445, September.
    9. Javed, Zanib & Munir, Kashif, 2016. "Impact of Export Composition on Economic Growth in South Asia," MPRA Paper 71519, University Library of Munich, Germany.
    10. Thomas I. Palley, 2013. "Global imbalances and the Revised Bretton Woods hypothesis: Wrong before the crisis and wrong after," IMK Working Paper 108-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    11. Alimi, Santos R. & Muse, Bernard O., 2012. "Export - led growth or growth – driven exports? Evidence from Nigeria," MPRA Paper 53468, University Library of Munich, Germany.
    12. N.R. Bhanumurthy & Sukanya Bose & Swayamsiddha Panda, 2014. "Modelling India’s External Sector: Review and Some Empirics," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 8(4), pages 457-493, November.
    13. Lee, GaSeul & Lim, Song Soo, 2015. "FTA effects on agricultural trade with matching approaches," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 9, pages 1-26.
    14. Assoc. Prof. Dr. Sule L. Aker & Prof. Ahmet Aker, 2016. "Export-led Growth Revisited in Emerging Economies," Journal of Business & Management (COES&RJ-JBM), , vol. 4(3), pages 140-150, July.
    15. Bhanumurthy, N.R. & Bose, Sukanya & Panda, Swayamsiddha, 2014. "Modeling India's External Sector: Review and Some Empirics," Working Papers 14/138, National Institute of Public Finance and Policy.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thomas I. Palley, 2011. "The Contradictions of Export-led Growth," Economics Public Policy Brief Archive ppb_119, Levy Economics Institute.
    2. Bilge Erten, 2010. "Industrial Upgrading and Export Diversification: A Comparative Analysis of Economic Policies in Turkey and Malaysia," Working Papers id:2778, eSocialSciences.
    3. Gairuzazmi Ghani, 2006. "Export Promotion Policies and the Crowding‐out Effect in Developing Countries," Asian Economic Journal, East Asian Economic Association, vol. 20(3), pages 319-331, September.
    4. Ofori, Isaac K. & Dossou, Marcel A.M. & Asongu, Simplice A. & Armah, Mark K., 2023. "Bridging Africa’s income inequality gap: How relevant is China’s outward FDI to Africa?," Economic Systems, Elsevier, vol. 47(1).
    5. Farole, Thomas & Moberg, Lotta, 2014. "It worked in China, so why not in Africa? The political economy challenge of Special Economic Zones," WIDER Working Paper Series 152, World Institute for Development Economic Research (UNU-WIDER).
    6. T. Paul Schultz, 2006. "Does the Liberalization of Trade Advance Gender Equality in Schooling and Health?," Working Papers 935, Economic Growth Center, Yale University.
    7. Ernesto Dal Bó & Pedro Dal Bó, 2011. "Workers, Warriors, And Criminals: Social Conflict In General Equilibrium," Journal of the European Economic Association, European Economic Association, vol. 9(4), pages 646-677, August.
    8. Kym Anderson, 2020. "Trade Protectionism In Australia: Its Growth And Dismantling," Journal of Economic Surveys, Wiley Blackwell, vol. 34(5), pages 1044-1067, December.
    9. Bibhuti Ranjan Mishra, 2020. "Role of External and Domestic Demand in Economic Growth: A Study of BRICS Countries," Global Business Review, International Management Institute, vol. 21(2), pages 547-566, April.
    10. Tilman Altenburg & Wilfried Lütkenhorst, 2015. "Industrial Policy in Developing Countries," Books, Edward Elgar Publishing, number 14726.
    11. Schwidrowski, Arnim & West, Peter J. & Benavente Escartin, José Miguel, 1991. "Política comercial y equidad," Series Históricas 9580, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    12. Pokrivcak, Jan, 2007. "Economics and Political Economy of Regional Trade Agreements," Working Papers 7286, TRADEAG - Agricultural Trade Agreements.
    13. Kaplinsky, Raphael, 2006. "Revisiting the revisited terms of trade: Will China make a difference?," World Development, Elsevier, vol. 34(6), pages 981-995, June.
    14. Jiancai Pi & Pengqing Zhang, 2020. "Organized crime and wage inequality," Scottish Journal of Political Economy, Scottish Economic Society, vol. 67(3), pages 344-361, July.
    15. Darcy W E Allen, 2020. "When Entrepreneurs Meet:The Collective Governance of New Ideas," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number q0269, January.
    16. Ashley S. Timmer & Jeffrey G. Williamson, 1996. "Racism, Xenophobia or Markets? The Political Economy of Immigration Policy Prior to the Thirties," NBER Working Papers 5867, National Bureau of Economic Research, Inc.
    17. Jonathan Brooks, 1996. "Agricultural Policies In Oecd Countries: What Can We Learn From Political Economy Models?," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 366-389, January.
    18. Harris,Colin & Cai,Meina & Murtazashvili,Ilia & Murtazashvili,Jennifer Brick, 2020. "The Origins and Consequences of Property Rights," Cambridge Books, Cambridge University Press, number 9781108969055.
    19. Pierre-Olivier Peytral, 2004. "Economie politique de la politique d'ouverture commerciale mixte : interactions entre les groupes sociaux et l'Etat," Post-Print halshs-00104875, HAL.
    20. Yao, Yang, 2014. "The Chinese Growth Miracle," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 7, pages 943-1031, Elsevier.

    More about this item

    Keywords

    Export-led Growth; Domestic Demand-led Growth; Economic Development; Stagnation;
    All these keywords.

    JEL classification:

    • F00 - International Economics - - General - - - General
    • F01 - International Economics - - General - - - Global Outlook
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F10 - International Economics - - Trade - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lev:wrkpap:wp_675. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Elizabeth Dunn (email available below). General contact details of provider: http://www.levyinstitute.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.