Balance-Of-Payments Constrained Growth: a Post-Keynesian Model with Capital Inflows
This paper proposes a brief theoretical analysis of the relationship between international capital mobility and economic growth, seen in the perspective of demand-led growth. The work comprises four sections, besides the introduction. First of all, we briefly present the central propositions that constitute the so-called demand-led growth perspective. We then review the balance-of-payments constrained growth model, as originally proposed by Thirlwall (1979), as well as subsequent efforts to incorporate capital flows into this analytical framework. Building on this theoretical structure, a model is proposed in order to study the connections between balance-of-payments constrained growth and capital controls, which is formally introduced as a macroeconomic policy variable. In the last section, we present the final remarks on this model.
|Date of creation:||May 2011|
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