69 research outputs found
Long-Run Growth in Open Economies: Export-Led Cumulative Causation or a Balance-of-Payments Constraint?
The post-Keynesian tradition contains two different models of long-run growth in open economies -- the model of export-led cumulative causation (ELCC) originally conceived by Nicholas Kaldor and the model of balance-of-payments-constrained growth (BPCG) developed by A.P. Thirlwall. These models diverge significantly in their core underlying assumptions. For example, they disagree about whether long-term gains in relative price competitiveness are possible and whether import demand constrains long-run growth. The two modeling approaches also yield conflicting policy implications. For example, some ELCC models imply that a domestic demand stimulus can boost long-run growth by sparking a virtuous circle of cumulative causation (including an endogenous increase in productivity growth), while most BPCG models imply that only policies that raise the income elasticity of export demand or lower the income elasticity of import demand can permit faster growth in the long run. The fact that both models have found econometric support suggests that each contains empirically supported elements, but the tests that have been conducted to date have not had sufficient power to distinguish between them. This paper will present both models in a common analytical framework to compare their theoretical differences and policy implications. The paper will argue that a generalized BPCG model that allows for financial flows and relative price effects can incorporate the cumulative causation feedbacks from the ELCC approach while also imposing the balance of payments equilibrium condition that is missing from the latter. The paper will also explore under what conditions different versions of the models apply.
NAFTA, Trade, and Development
The post-Keynesian tradition contains two different models of long-run growth in open economies -- the model of export-led cumulative causation (ELCC) originally conceived by Nicholas Kaldor and the model of balance-of-payments-constrained growth (BPCG) developed by A.P. Thirlwall. These models diverge significantly in their core underlying assumptions. For example, they disagree about whether long-term gains in relative price competitiveness are possible and whether import demand constrains long-run growth. The two modeling approaches also yield conflicting policy implications. For example, some ELCC models imply that a domestic demand stimulus can boost long-run growth by sparking a virtuous circle of cumulative causation (including an endogenous increase in productivity growth), while most BPCG models imply that only policies that raise the income elasticity of export demand or lower the income elasticity of import demand can permit faster growth in the long run. The fact that both models have found econometric support suggests that each contains empirically supported elements, but the tests that have been conducted to date have not had sufficient power to distinguish between them. This paper will present both models in a common analytical framework to compare their theoretical differences and policy implications. The paper will argue that a generalized BPCG model that allows for financial flows and relative price effects can incorporate the cumulative causation feedbacks from the ELCC approach while also imposing the balance of payments equilibrium condition that is missing from the latter. The paper will also explore under what conditions different versions of the models apply.
Export-led growth, real exchange rates and the fallacy of composition
exports, exchange rates
NAFTA, Trade and Development (Robert A. Blecker and Gerardo Esquivel)
Freihandelszone; Wirtschaftslage; Außenhandel; NAFTA-Staaten
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Price Competition and the Fallacy of Composition in Developing Country Exports of Manufactures: Estimates of Short-Run Growth Effects
This paper studies whether intra-developing country price competition has significant effects on the short-run growth rates of developing countries that are specialized in manufactured exports. Regression estimates using the generalized method of moments (GMM) applied to annual panel data for 17 developing countries in 1983-2004 show that these countries exhibit a “fallacy of composition,” in the sense that a real depreciation relative to competing developing country exporters increases the home country’s growth rate in the short run. The results also suggest that real depreciations for these developing countries relative to the industrialized countries are contractionary
Feminist Economics, Setting out the Parameters
___Introduction___
Feminist economics has developed its position over the past decade, towards a firmer embeddedness in economic science and a source of inspiration for activists, policy makers, and social science researchers in a wide variety of fields of research. This development has come about in a relatively short period of time, as is reflected, for example, in the follow-up book of the feminist economic primer Beyond Economic Man (Ferber/Nelson 1993), published ten years later: Feminist Economics Today (Ferber/Nelson, 2003) The strengthened position of feminist economics also shows in the 10-year anniversary of the prize-winning journal Feminist Economics, the flourishing of the International Association for Feminist Economics (IAFFE), as well as the more regular demand for feminist economic policy advise by institutions like the UN, OECD and governments in developed and developing countries, and in well-established training courses in feminist economics, such as at the Institute of Social Studies and University of Utah .
It is impossible to give a fair overview of the state of the art of feminist economics in the number of pages available, even when limited to issues pertaining to development and macroeconomics . As a consequence, this is a very sketchy and subjective overview of what I perceive to be recent developments in feminist economics that have relevance for feminist development analysis and policy. The next section recognizes three trends in feminist economics, in particular the engagement of feminist economists with heterodox schools of economics. The following sections will briefly review developments in methodology and methods in feminist economics. These will be followed by three sections on topics that have recently become key themes or areas of research in feminist economics, in particular in the area of development economics: unpaid labour and the care economy; the two-way relationship between gender and trade; and gender, efficiency and growth. Each of these topics will be introduced, with references to the main literature, and some links to policy recommendations. The paper will end with a conclusion
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