Levels of Economic Development and Harrod foreign trade
Estimates of export and import demand functions for ninety countries using Stock and Watson (1993) Dynamic OLS are presented. These estimates are then used to examine the relationship between levels of economic development and Harrod foreign trade multiplier. We show that there is an inverted U relations, as predicted by Thirlwall (1997), contrary to Bairam (1997, 1993). Absence of inverse relation between levels of economic development and Harrod foreign trade multiplier imply that Thirlwall's law does not imply convergence.
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- Anthony P. Thirlwall, 2011.
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- Anthony Philip Thirlwall, 1979. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 32(128), pages 45-53.
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- Erkin I. Bairam, 1997. "Levels of Economic Development and Appropriate Specification of the Harrod Foreign-Trade Multiplier," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 19(3), pages 337-344, April.
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