Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/277366 
Year of Publication: 
2016
Citation: 
[Journal:] European Journal of Economics and Economic Policies: Intervention (EJEEP) [ISSN:] 2052-7772 [Volume:] 13 [Issue:] 3 [Year:] 2016 [Pages:] 275-290
Publisher: 
Edward Elgar Publishing, Cheltenham
Abstract: 
Several recent critiques have questioned the theoretical logic of standard models of balance-of-payments-constrained growth (BPCG) and the empirical support for 'Thirlwall's law'. On the empirical side, critics charge that most econometric estimates of this model have effectively only tested whether exports and imports grow at similar rates in the long run. On the theoretical side, the criticisms have focused on the role of foreign income growth, capital accumulation, relative prices and country size in BPCG models. This article reviews the current state of the debate over these critiques and also offers a brief discussion and evaluation of three alternative models. The alternative models all highlight a significant role for the level of relative prices (or the real exchange rate) in determining long-run growth, which is consistent with recent empirical studies.
Subjects: 
balance-of-payments-constrained growth
Thirlwall's law
relative prices
real exchange rates
JEL: 
E12
F43
F32
O41
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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