New Measurement Tools of the External-Constrained Growth Model, with Applications for Latin America

  • Juan Carlos Moreno-Brid
  • Carlos Ricoy
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 551)

Summary

In the spirit of the New Tools perspective, this paper presents an overview that identifies the main changes in the measurement toolkit that have been used to test the empirical adequacy of the balance of payments constrained growth model (BPC-model) for comparative macroeconomic analysis as well as for the study of the long-term constraints on economic growth. It takes into account the BPC-model in its initial formulation, as put forward by A.P. Thirlwall nearly three decades ago, as well as in its recent developments introduced to account for alternative definitions of long-term equilibrium. It shows how the theoretical revisions of the BPC-model have been accompanied by a sophistication of its empirical testing techniques, better suited for the applied analysis of long-term economic relations. In addition, the toolkit currently used within this analytical perspective is illustrated with data for the Mexican economy, based on a version of the BPC-model that explicitly focuses on the relevance of the influence of interest payments on the economys long-term external equilibrium. The paper ends with some comments on the policy implications that may be derived from the application of the BPC-model, with special reference to the case of Latin America.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 1.
    Blecker R.A. (1999) Taming Global Finance, Washington: Economic Policy Institute.Google Scholar
  2. 2.
    Dutt, A. (2001), “Income elasticities of imports, north-south trade and uneven development”, Department of Economics, University of Notre Dame, unpublished.Google Scholar
  3. 3.
    Enders, W. (1995), Applied Econometric Time Series, New York: John Wiley.Google Scholar
  4. 4.
    Kaldor, N. Further Essays on Economic Theory. London: Duckworth. 1978.Google Scholar
  5. 5.
    Kaldor, N. “Discussion”, in D. Currie, R. Nobay, D. Peel (eds.) Macroeconomic Analysis. London: Croom Helm. 1981.Google Scholar
  6. 6.
    McCombie, J.S.L. (1998), “Harrod, economic growth and international trade”, in G. Rampa et al (Eds.) Economic Dynamics, Trade and Growth, London: McMillan Press.Google Scholar
  7. 7.
    McCombie, J.S.L. (1997), “On the empirics of balance-of-payments-constrained growth”, Journal of Post Keynesian Economics, Vol.19, pp.345–375.Google Scholar
  8. 8.
    McCombie, J.S.L. (1989), “Thirlwalls Law and balance-of-payments-constrained growth: a comment on the debate”, Applied Economics, Vol.21, pp.611–629.Google Scholar
  9. 9.
    McCombie, J.S.L. and A.P. Thirlwall (1999), “Growth in an international context: a Post Keynesian view” in J. Deprez and J.T. Harvey (Eds.) Foundations of International Economics: Post Keynesian Perspectives, London: Routledge.Google Scholar
  10. 10.
    McCombie, J.S.L. and A.P. Thirlwall (1997), “Economic growth and the balance-ofpayments constraint revisited”, in Arestis et al (Eds.) Markets, Unemployment and Economic Policy, New York: Routledge.Google Scholar
  11. 11.
    McCombie, J.S.L. and A. P. Thirlwall (1994), Economic Growth and the Balance of Payments Constraint, New York: St. Martins Press.Google Scholar
  12. 12.
    Moreno-Brid, J.C. (1998–99), “On capital flows and the balance-of-payments constrained growth model”, Journal of Post Keynesian Economics, Vol.21, pp.283–289.Google Scholar
  13. 13.
    Moreno-Brid, J.C. (2001), Essays on Economic Growth and the Balance of Payments Constraint; with special reference to the case of Mexico, Ph.D. dissertation, Faculty of Economics and Politics, University of Cambridge, United Kingdom.Google Scholar
  14. 14.
    Moreno-Brid, J.C. (2003), Capital Flows, Interest Payments and the Balance-of-Payments Constrained Growth Model; a theoretical and an empirical analysis, Metroeconomica, Vol.54, May/September, No.2 & 3.Google Scholar
  15. 15.
    Singh, A. “UK industry and the world economy: a case of de-industrialisation”, Cambridge Journal of Economics, Vol., 1, pp. 113–136, 1977.Google Scholar
  16. 16.
    Thirlwall, A.P. (1998), “The balance of payments and growth: from mercantilism to Keynes to Harrod and beyond”, in G. Rampa, et al (Eds.) Economic DynamicsGoogle Scholar
  17. 17.
    Trade and Growth, London: McMillan Press.Google Scholar
  18. 18.
    Thirlwall, A. P. Balance of Payments Theory and the United Kingdom Experience. London: Macmillan. 1980.Google Scholar
  19. 19.
    Thirlwall, A.P. (1979), “The balance of payments constraint as an explanation of international growth rates differences”, Banca Nazionale del Lavoro, Quarterly Review, Vol.128, pp.45–53. 346 Juan Carlos Moreno-Brid and Carlos RicoyGoogle Scholar
  20. 20.
    Thirlwall, A.P. and M.N. Hussain (1982), “The balance of payments constraint, capital flows and growth rates differences between developing countries”, Oxford Economic Papers, Vol.34, pp.498–509.Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2005

Authors and Affiliations

  • Juan Carlos Moreno-Brid
    • 1
  • Carlos Ricoy
    • 2
  1. 1.Economic Commission for Latin America and the Caribbean (ECLAC)Mexico
  2. 2.Departamento de Fundamentos del Análisis EconómicoUniversidad de Santiago de CompostelaSpain

Personalised recommendations