Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/261551 
Year of Publication: 
2020
Citation: 
[Journal:] Journal of Economic Structures [ISSN:] 2193-2409 [Volume:] 9 [Issue:] 4 [Publisher:] Springer [Place:] Heidelberg [Year:] 2020 [Pages:] 1-22
Publisher: 
Springer, Heidelberg
Abstract: 
A notable macroeconomic explanation of uneven development, with particular relevance to developing countries, has been the problem of balance of payments constraints, as captured by Thirlwall's Law: where relative growth rates are explained by differences between income elasticities for exports and imports. Araujo and Lima have formulated a one-country multisectoral disaggregation of this hypothesis using a vertically integrated input-output framework, which is extended here in two main ways. First, international trade in intermediate inputs-the basis for Global Value Chains-is introduced; second, the model is extended to multiple countries. The main outcome of the paper is the development of a new multisectoral method for modelling balance of payments constraints: a Multi-Country Sectoral Thirlwall Law (MCSTL) under which key sector relationships are nested in intercountry trading relationships that encompass both intermediate and final goods. The identification of this input-output structure is developed in analytical stages, moving from a one-country vertically integrated system, to two, three and finally multi-country systems. In addition to its theoretical contribution to understanding the industrial structure of trade, an implication of this multi-country/multi-sector approach is that it can also be tested in future empirical work using the recently available World Input-Output Database of national tables.
Subjects: 
Uneven development
Thirlwall's Law
Global Value Chains
Input-output analysis
Vertical integration
Trade in value added
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article

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