Balance of Payments Constrained Growth Models: History and Overview

Abstract

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Fairtrade and Labour Markets in Ethiopia and Uganda

“…Clearly, though, not all larger farmers behave equally efficiently or treat their workers decently: scale does not act as an automatic vector of developmental change. The implications are that policy makers could design interventions that have a realistic chance of being implemented, that are more likely to contribute to rapid growth of productivity and to efforts to address the binding balance of payments constraint on growth in low--income countries (Thirlwall, 2011), and that have a greater chance of generating poverty--reducing wage labour opportunities --if they are concentrated on the relatively large and best managed farms. That larger agricultural producers often fall short of their evident potential points to the need to combine any favourable policy support for them with the enforcement of discipline or what Amsden (2001: 8) termed a 'reciprocal control mechanism'.…”

Export-Led Growth, Global Integration, and the External Balance of Small Island Developing States

“…Thus, the model can be used to understand how an exogenous export demand drives the national economy and the external debt, but not to study public spending, central bank operations, and similar internal dynamics. The focus on the external balance is reminiscent of balance of payments-constrained growth models (Thirlwall 1979(Thirlwall , 2011, but unlike those models it is meant to apply in the short and medium terms, and not only the long run, so we do not impose a zero trade balance.…”

Productivity, social expenditure and income distribution in Latin America

“…The higher is e, the higher the share of the country in the distribution of global effective demand, i.e., the higher is its market share in the domestic and international economy. The income elasticity ratio gives the rate of growth rate at which the country can grow without facing mounting disequilibria in the external front -The BOP-constrained growth rate, widely used in Keynesian growth models (Thirlwall, 1979(Thirlwall, , 2011Setterfield, 2009;Blecker, 2013) and in the structuralist tradition in development theory (Rodriguez, 1977(Rodriguez, , 2007Porcile, 2011, 2014). The income elasticity ratio in turn is a function of the country's production structure: what the country produces matters for growth.…”