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“Thirlwall’s Law” reconsidered

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  • Leon Podkaminer

    (The Vienna Institute for International Economic Studies)

Abstract

Thirlwall’s Law is found to be the necessary but not sufficient condition for balanced long-run growth. A simple equation is considered whose empirical analysis could confirm—or reject—the validity of the Law. The analysis, conducted by means of econometric co-integration using the Dynamic Ordinary Least Squares method applied to data for 59 countries covering the years 1960–2012, suggests that Thirlwall’s Law may not hold for the decisive majority of countries.

Suggested Citation

  • Leon Podkaminer, 2017. "“Thirlwall’s Law” reconsidered," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(1), pages 29-57, February.
  • Handle: RePEc:kap:empiri:v:44:y:2017:i:1:d:10.1007_s10663-015-9310-6
    DOI: 10.1007/s10663-015-9310-6
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    Cited by:

    1. Elias Soukiazis & Micaela Antunes & Ioannis Kostakis, 2018. "The Greek economy under the twin-deficit pressure: a demand orientated growth approach," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(2), pages 215-236, March.
    2. Leon Podkaminer, 2018. "‘Old’ Europe’s wage dynamics and trade imbalances: Is there a link?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(2), pages 395-408, May.

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    More about this item

    Keywords

    Thirlwall’s Law; Trade elasticities; Balanced growth; Co-integration; DOLS;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F15 - International Economics - - Trade - - - Economic Integration
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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