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Is the balance of payments a restriction to the economic growth of Brazilian states? An analysis for the 1991-2009 period

Author

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  • Felipe de Souza Bastos
  • Guilherme Irffi
  • Ivan Castelar

Abstract

This paper investigates whether there is a restriction imposed by the balance of payments – through the relationship between income elasticities of imports and exports - on the economic growth of Brazilian states. In other words, it checks the validity of Thirlwall's Law to the Brazilian states in the period from 1991 to 2009. These elasticities were estimated using the dynamic panel estimator system-GMM, which circumvents the classical endogeneity problem inherent to dynamic panels. The results point out to the validity of the law, since the income elasticity of imports was higher than the income elasticity of exports. JEL Classification: E12; F00; C01.

Suggested Citation

  • Felipe de Souza Bastos & Guilherme Irffi & Ivan Castelar, 2017. "Is the balance of payments a restriction to the economic growth of Brazilian states? An analysis for the 1991-2009 period," Brazilian Journal of Political Economy, Center of Political Economy, vol. 37(1), pages 226-242.
    • Handle: RePEc:ekm:repojs:v:37:y:2017:i:1:p:226-242:id:116
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    Keywords

    economic growth; Brazilian states.; Thirlwall’s Law;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • F00 - International Economics - - General - - - General
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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