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Path dependence, distributive cycles and export capacity in a BoPC growth model

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  • Marwil J. Dávila-Fernández

    ()

  • Serena Sordi

    ()

Abstract

In a recent article, we extended Goodwin's (1967) model to study the interaction between distributive cycles and international trade for economies in which growth is balance-of-payments constrained (BoPC). Building on that set up, we investigate the implications of allowing exports to be a function of the capital stock. Using the existence part of the Hopf bifurcation theorem, we show that the resulting 3-dimensional system admits a limit cycle solution. We rely on numerical simulations to verify if fluctuations are persistent and bounded. Applying panel cointegration techniques, we also provide empirical evidence for a sample of 19 OECD countries between 1950-2014 that gives support to the formulation adopted for the exports function. Our main contribution lies in providing a simple base-line model to study distributive dynamics in open economies in line with recent developments in the BoPC growth literature.

Suggested Citation

  • Marwil J. Dávila-Fernández & Serena Sordi, 2018. "Path dependence, distributive cycles and export capacity in a BoPC growth model," Department of Economics University of Siena 785, Department of Economics, University of Siena.
  • Handle: RePEc:usi:wpaper:785
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    File URL: http://repec.deps.unisi.it/quaderni/785.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ricardo A. Araújo & Marwil J. Dávila-Fernández, 2018. "Some new insights on the empirics of Goodwin’s growth-cycle model," Department of Economics University of Siena 790, Department of Economics, University of Siena.

    More about this item

    Keywords

    Growth cycle; Path dependence; Thirlwall?s law; Distributive cycles; Hopf bifurcation; Cointegration.;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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