New advances and controversies in the framework of balance‐of‐payments‐constrained growth

This article surveys selected recent contributions and debates regarding fundamental aspects of the theory of balance‐of‐payments‐constrained growth (BPCG). The survey focuses mainly on studies, from roughly the period since 2010, in four broad (and related) areas: whether and how relative prices and the real exchange rate affect export performance and long‐run growth; the role of endogenous technological progress; the causes and consequences of structural change; and the dynamics of adjustment toward (or cycles around) a long‐run growth equilibrium with a balance‐of‐payments constraint. The discussion also highlights the increasing incorporation of insights from other theoretical traditions (Kaleckian, Kaldorian, Schumpeterian, Goodwinian, and structuralist) into the BPCG framework. The survey suggests the need to clarify the underlying assumptions and policy implications of the BPCG model and to complement its focus on long‐run growth rates with analyses of medium‐run adjustments and level effects.