Trade liberalization, the income elasticity of demand for imports, and growth in Latin America

Pacheco‐López, Penélope; Thirlwáll, A. P.

doi:10.2753/pke0160-3477290103

Cited by 38 publications

(13 citation statements)

References 18 publications

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“…The doubling of Zambia's income elasticity of demand for imports in the post-liberalisation period is consistent with other studies that have also reported large increases in the income elasticity of demand for imports after major trade and financial liberalisation measures (see e.g. Moreno-Brid, 1999;Nell, 2013;Pacheco-López, 2005;Santos-Paulino & Thirlwall, 2004).…”

Section: Empirical Results Of the Import Demand Functionsupporting

confidence: 90%

The relevance of Thirlwall’s growth law in the Zambian economy

Chimfwembe

Nell

2023

Metroeconomica

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This paper uses a blended methodology—conventional tests of ‘Thirlwall's law’ combined with an in‐depth growth narrative approach and unit root tests—to identify the dominant balance‐of‐payments adjustment mechanism in the Zambian economy over the period 1956–2017. Consistent with Thirlwall's growth law, the main results identify income changes as the dominant balance‐of‐payments adjustment mechanism, rather than relative price changes. The three‐regime export demand function further reflects the vulnerability of the Zambian economy to unexpected busts in the world copper market, and highlights the need for effective industrial policies to create a more diversified economy into higher value‐added manufactures. The analysis also demonstrates that the results are robust to some of the main criticisms that have been levelled against Thirlwall's original growth law.

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Section: Empirical Results Of the Import Demand Functionsupporting

confidence: 90%

The relevance of Thirlwall’s growth law in the Zambian economy

Chimfwembe

Nell

2023

Metroeconomica

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“…Existing literature indicates a mixed impact of trade liberalisation on the economy's exports, imports and capital flows. For example, Pacheco-López (2005) find that trade reforms in Mexico significantly affect its imports, but its impact on the exports is negligible. Bustos (2011) claims that the free trade agreement (in the context of MERCOSUR) quadrupled Argentina's exports to Brazil but increased only 60% of exports to the rest world between 1992 and 1996.…”

Section: Literature Reviewmentioning

confidence: 99%

Trade liberalisation and trade and capital flows: Evidence from China pilot free trade zones

Bao

Dai²,

Feng

et al. 2023

World Economy

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China established several Pilot Free Trade Zones (PFTZs) in recent years as a major step to deepen trade liberalisation. In this paper, we investigate the impact of free trade zones (FTZs) on the economy's capital flow, imports and exports, as well as the underlying mechanisms. We consider the newly established FTZs as a natural experiment and construct a difference-in-difference (DID) model with the staggered establishment dates of the FTZs. Our results show that FTZs promote local foreign direct investment (FDI) and outward foreign direct investment (OFDI), but their influence on goods exports and imports remains limited. K E Y W O R D Scapital inflows and outflows, China pilot free trade zone, difference-in-differences method, exports and imports, trade liberalisation

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“…Latin America has been historically a region in which external constraints played a major role in halting the economic development process of the region (Bertola & Ocampo, 2012). The trade balance has been a major source of economic constraints throughout its historical development generating a pattern of strong volatility in the region (López & Thirlwall, 2006;Ocampo et al, 2009). rates in the beginning of the 1980's (Ocampo, 2004).…”

Section: Chapter 4 139mentioning

confidence: 99%

“…The estimations start from explicit import and export functions. Using the usual representation of these functions, following López & Thirlwall (2006) -changing the notation to the one used in Dutt (2002), and chapter 3 -we have:…”

Section: Estimations Of the Bpcm For Latin American Countriesmentioning

confidence: 99%

“…From the CHAPTER 4 151 estimation of the parameters in eq. (4.4), López & Thirlwall (2006) use a pooled regression to get the following estimates for Latin American Countries ( for estimates): López & Thirlwall (2006) The authors calculate the parameters associated to the Thirlwall law and the difference between predicted value (by the model) and the observed GDP values. This is the usual procedure in the literature to estimate the BPCM parameters.…”

Section: Estimations Of the Bpcm For Latin American Countriesmentioning

confidence: 99%

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Cycles, economic structures and external constraints

Spinola¹

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People interested in the research are advised to contact the author for the final version of the publication, or visit the DOI to the publisher's website. • The final author version and the galley proof are versions of the publication after peer review. • The final published version features the final layout of the paper including the volume, issue and page numbers. Link to publication General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal. American economies (Argentina, Brazil, Colombia, and Mexico). We apply impulse-response analysis on selected variables, testing the main assumption of the BPCM. This chapter also aims to look how exogenous shocks affect the economic system, observing the adjustment dynamics and the short-to long-run trajectory. This highlights the endogenous pattern of volatility and how the system answers to shocks in their key variables: trade balance, domestic growth and the real exchange rate (terms of trade).

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Trade liberalization, the income elasticity of demand for imports, and growth in Latin America

Cited by 38 publications

References 18 publications

The relevance of Thirlwall’s growth law in the Zambian economy

The relevance of Thirlwall’s growth law in the Zambian economy

Trade liberalisation and trade and capital flows: Evidence from China pilot free trade zones

Cycles, economic structures and external constraints

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