IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/29990.html
   My bibliography  Save this paper

Hypothèse de Thirlwall: cas des pays de la zone Franc
[Thirlwall’s hypothesis : the case of countries of the Franc Zone]

Author

Listed:
  • Chassem, Nacisse Palissy

Abstract

The purpose of this study is to test the hypothesis of Thirlwall (1979) for the countries of the Franc Zone. These countries share in common the fixed parity of their currencies against the euro. One issue that concerns most of these countries is the current account deficit. By applying the cointegration bounds test of Pesaran et al. (2001) to annual data (1970-2006), the study shows that Thirlwall's hypothesis is verified for at least 11 of the 15 countries of the Franc Zone. This result raises the question of the effectiveness of current account deficits recorded by these countries and suggests that expansionary monetary policy, strategies for export growth, reevaluation of the CFA franc against the euro would help to relax the constraint of balance of payments on demand and thus accelerate economic growth without damaging the current account in the Franc Zone.

Suggested Citation

  • Chassem, Nacisse Palissy, 2011. "Hypothèse de Thirlwall: cas des pays de la zone Franc [Thirlwall’s hypothesis : the case of countries of the Franc Zone]," MPRA Paper 29990, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:29990
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/29990/1/MPRA_paper_29990.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    2. Jesus Felipe & J. S. L. McCombie & Kaukab Naqvi, 2010. "Is Pakistan's Growth Rate Balance-of-Payments Constrained? Policies and Implications for Development and Growth," Oxford Development Studies, Taylor & Francis Journals, vol. 38(4), pages 477-496.
    3. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    4. Thirlwall, Anthony P & Hussain, Mohammed Nureldin, 1982. "The Balance of Payments Constraint, Capital Flows and Growth Rate Differences between Developing Countries," Oxford Economic Papers, Oxford University Press, vol. 34(3), pages 498-510, November.
    5. N. Emmanuel Tambi, 1998. "Trade liberalization effects on commodity imports in Cameroon," Journal of Economic Studies, Emerald Group Publishing, vol. 25(3), pages 193-202, September.
    6. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    7. Hoque, Mohammad Monjurul & Yusop, Zulkornain, 2010. "Impacts of trade liberalisation on aggregate import in Bangladesh: An ARDL Bounds test approach," Journal of Asian Economics, Elsevier, vol. 21(1), pages 37-52, February.
    8. Funke, Michael & Ruhwedel, Ralf, 2001. "Export variety and export performance: empirical evidence from East Asia," Journal of Asian Economics, Elsevier, vol. 12(4), pages 493-505.
    9. Jonathan Perraton, 2003. "Balance of Payments Constrained Growth and Developing Countries: An examination of Thirlwall's hypothesis," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(1), pages 1-22.
    10. Norman V. Loayza & Romain Rancière & Luis Servén & Jaume Ventura, 2007. "Macroeconomic Volatility and Welfare in Developing Countries: An Introduction," The World Bank Economic Review, World Bank, vol. 21(3), pages 343-357, October.
    11. Erkin I. Bairam, 1997. "Levels of Economic Development and Appropriate Specification of the Harrod Foreign-Trade Multiplier," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 19(3), pages 337-344, March.
    12. Mah, Jai S., 2000. "An empirical examination of the disaggregated import demand of Korea--the case of information technology products," Journal of Asian Economics, Elsevier, vol. 11(2), pages 237-244.
    13. Tuck Cheong Tang & Mahendhiran Nair, 2002. "A cointegration analysis of Malaysian import demand function: reassessment from the bounds test," Applied Economics Letters, Taylor & Francis Journals, vol. 9(5), pages 293-296.
    14. J. S. L. McCombie & A. P. Thirlwall, 1994. "Economic Growth and the Balance-of-Payments Constraint," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-23121-8, September.
    15. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    16. Tang, Tuck Cheong, 2003. "Japanese aggregate import demand function: reassessment from the 'bounds' testing approach," Japan and the World Economy, Elsevier, vol. 15(4), pages 419-436, December.
    Full references (including those not matched with items on IDEAS)

    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. Ahmad Jafari Samimi & Ramezan Hosseinzadeh, 2011. "Foreign Trade and Economic Growth: Evidence of Thirlwall’s Law in Iran," Journal of Social and Development Sciences, AMH International, vol. 2(2), pages 81-88.
    2. Tang, Tuck Cheong, 2003. "An empirical analysis of China's aggregate import demand function," China Economic Review, Elsevier, vol. 14(2), pages 142-163.
    3. Chassem, Nacisse Palissy, 2011. "Effets de long terme du taux de change réel sur la balance commerciale nominale et réelle en zone Franc africaine [Long-run effects of real exchange rate on the nominal and real trade balance in Af," MPRA Paper 30252, University Library of Munich, Germany.
    4. Mohammad Monjurul Hoque & Zulkornain Yusop, 2012. "Impacts of Trade Liberalization on Export Performance in Bangladesh: An Empirical Investigation," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 13(2), pages 207-239, September.
    5. Sebastien Charles & Thomas Dallery & Jonathan Marie, 2022. "The slowing of growth in France: an interpretation based on Thirlwall’s law," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 45(1), pages 100-129, January.
    6. A. P. Thirlwall, 2013. "Economic Growth in an Open Developing Economy," Books, Edward Elgar Publishing, number 15208.
    7. Anthony Philip Thirlwall, 2012. "Balance of Payments Constrained Growth Models: History and Overview," Palgrave Macmillan Books, in: Elias Soukiazis & Pedro A. Cerqueira (ed.), Models of Balance of Payments Constrained Growth, chapter 1, pages 11-49, Palgrave Macmillan.
    8. Civcir, Irfan & Panshak, Yohanna & Ozdeser, Huseyin, 2021. "A multi-sectoral balance of payments constrained growth approach with intermediate imports: The case of Nigeria," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 240-250.
    9. M. Adetunji Babatunde & Festus O. Egwaikhide, 2010. "Explaining Nigeria's import demand behaviour: a bound testing approach," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 9(2), pages 167-187, July.
    10. Fugarolas Álvarez-Ude, Guadalupe & Mañalich Gálvez, Isis & Matesanz Gómez, David, 2008. "Empirical Evidence Of The Balance Of Payments Constrained Growth In Cuba. The Effects Of Comercial Regimes Since 1960," MPRA Paper 6993, University Library of Munich, Germany.
    11. Tang, Tuck Cheong, 2003. "Japanese aggregate import demand function: reassessment from the 'bounds' testing approach," Japan and the World Economy, Elsevier, vol. 15(4), pages 419-436, December.
    12. Siong Hook Law, 2008. "Does a Country's Openness to Trade and Capital Accounts Lead to Financial Development? Evidence from Malaysia," Asian Economic Journal, East Asian Economic Association, vol. 22(2), pages 161-177, June.
    13. Pedro Hugo Clavijo Cortes, 2017. "Balance comercial y volatilidad del tipo de cambio nominal: Un estudio de series de tiempo para Colombia," Revista Economía y Región, Universidad Tecnológica de Bolívar, vol. 11(1), pages 37-58, June.
    14. Senay, Acikgöz & Mert, Merter, 2015. "The endogeneity of the natural rate of growth: An alternative approach," Economics Discussion Papers 2015-2, Kiel Institute for the World Economy (IfW Kiel).
    15. Yohanna Panshak & Irfan Civcir & Hüseyin Ozdeser, 2019. "Technology Gap and the Role of National Innovation System in a Balance of Payments Constrained Growth Model: Empirical Evidence From Nigeria," SAGE Open, , vol. 9(1), pages 21582440198, February.
    16. Ergin Akalpler & Musa Shingil, 2023. "The role of income, exports and capital flows on domestic income growth: empirical evidence from Denmark," International Journal of Economic Policy Studies, Springer, vol. 17(2), pages 473-488, August.
    17. Hoque, Mohammad Monjurul & Yusop, Zulkornain, 2010. "Impacts of trade liberalisation on aggregate import in Bangladesh: An ARDL Bounds test approach," Journal of Asian Economics, Elsevier, vol. 21(1), pages 37-52, February.
    18. Arslan Razmi, 2005. "Balance of Payments Constrained Growth Model: The Case of India," UMASS Amherst Economics Working Papers 2005-05, University of Massachusetts Amherst, Department of Economics.
    19. Ricardo Azevedo Araujo & Gilberto Tadeu Lima, 2007. "A structural economic dynamics approach to balance-of-payments-constrained growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 31(5), pages 755-774, September.
    20. Muhammad Shafiullah & Ravinthirakumaran Navaratnam, 2016. "Do Bangladesh and Sri Lanka Enjoy Export-Led Growth? A Comparison of Two Small South Asian Economies," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(1), pages 114-132, March.

    More about this item

    Keywords

    Thirlwall’s hypothesis; Balance of payments constrained growth rate; cointegration bounds test; Franc Zone;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

    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:pra:mprapa:29990. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.