New insights from a structural economic dynamic approach to balance of payments constrained growth

In this paper it is shown that once-for-all variations in the level of the exchange rate may play an important role in the sectoral composition of the economy and this fact has important implications in terms of a disaggregated version of the Thirlwall’s law even if the argument of the quantitative unimportance of relative price movements holds. The growth rate of a country is then shown to be affected by once-for-all movements in the level of nominal exchange rates and the concept of a natural exchange rate is introduced.Structural Economic Dynamics, Thirlwall’s law, Exchange rates

A neo-Kaldorian approach to structural economic dynamics

Although the structural economic dynamic approach provides a simultaneous consideration of demand and supply sides of economic growth, it does not fully take into account the possible role played by demand in the generation of technical progress. From a neo-Kaldorian perspective, this paper seeks to establish the concepts of demand and productivity regimes in an open version of the pure labour Pasinettian model. In order to derive the demand regime, a disaggregated version of the static Harrod foreign multiplier is derived, while the productivity regime is built in terms of disaggregated Kaldor–Verdoorn laws. The upshot is a multi-sectoral growth model of structural change and cumulative causation, in which an open version of the Pasinettian model to foreign trade may be obtained as a particular case. Furthermore, we show that the evolution of demand patterns, while being affected by differential rates of productivity growth in different sectors of the economy, also play an important role in establishing the pace of technical progress

A multi-sectoral approach to the Harrod foreign trade multiplier

With this inquiry, we seek to develop a multi-sectoral version of the static Harrod foreign trade multiplier, by showing that it can be derived from an extended version of the Pasinettian model of structural change and international trade. This new version highlights the connections between the balance-of-payments and levels of employment and production. It is also shown that from this disaggregated version of the Harrod foreign multiplier we can derive an aggregate version of the multiplier. By following this approach we go a step further in establishing the connections between the Structural Economic Dynamic and Balance-of-Payments Constrained Growth approaches

‘Export Led Growth’ x ‘Growth Led Exports’: What Matters for the Brazilian Growth Experience after Trade Liberalization?

In this paper we study the Brazilian growth experience after trade liberalization by testing both the Export Led Growth (ELG) and the Growth Led Exports (GLE) hypotheses through a causality test between exports and gross domestic output (GDP). The paper provides further evidence that after openness both ELG and GLE hypotheses are useful to explain the Brazilian growth experience.Export led growth, Growth Led Exports, Thirlwall’s law, Granger causality test.

Adverse Selection in an Efficiency Wage Model with Heterogeneous Agents

This paper studies efficiency wages in the presence of heterogeneous workers and asymmetric information. It includes an incentive compatibility constraint (ICC) in the efficiency wage model with heterogeneous workers to show that the implementation of efficiency wages in the presence of heterogeneity faces the problem of adverse selection. Employees with a smaller effort aversion supply a smaller level of effort than what is optimal under perfect information due to hidden information. In this vein only a second best solution is obtained.Efficiency Wages, Adverse Selection, Asymmetric Information

The Liberalization of Capital Outflows in CIBS: What Opportunities for Other Developing Countries?

This paper examines the implications of the liberalization of capital outflows in China, India, Brazil, and South Africa (CIBS) for other developing countries. It focuses on their prospects of attracting not only foreign direct investment (FDI), but also portfolio capital flows from CIBS. To inform the discussion, two steps are taken: first, in order to identify the type of capital flows that might come from CIBS, the paper briefly describes capital account liberalization measures undertaken by CIBS to date and future intended liberalization. Second, it maps geographic distribution of outward FDI and foreign portfolio investment in the recent past, which are taken as possible predictors of future flows. The paper shows that portfolio investment goes mainly to OECD countries and offshore financial centres, and only a small share to developing countries. But, within developing countries, CIBS? neighbouring countries have shown a greater ability to attract this type of investment, compared with other developing countries.capital account liberalization, FDI, portfolio capital flows, south?south capital flows, developing countries

Embodied technological change, capital sectoral allocation and export-led growth

This paper contributes to the literature on economic growth by seeking to join several lines of research on structural factors in a more fully specified framework, on the one hand, and by making this more inclusive supply side to interact with demand factors in a model of export-led growth, on the other hand. Balance-of-payments constraints influence the adoption of investment-specific technological change which requires the import of capital goods, while the sectoral allocation of physical and human capital is likewise revealed to be crucial for economic growth, both results having important policy implications.embodied technological change; sectoral allocation of investment; human capital accumulation; export-led growth

On the existence and the number of limit cycles in evolutionary games

In this paper it is shown that an extended evolutionary system proposed by Hofbauer and Sigmund (1998) may be transformed into a Kukles system. Then a Dulac-Cherkas function related to the Kukles system is derived, which allows us to determine the number of limit cycles or its non-existence.limit cycles, evolutionary game theory, Kukles system, Dulac-Cherkas function

Decisions on investment allocation in the post-Keynesian growth models

In this article the analysis developed by Feldman (1928) and Mahalanobis (1953) are incorporated to the Post-Keynesian Growth Model to consider the decisions of investment allocation on economic growth. By adopting this approach it is possible to study the interaction between distributive features and investment allocation which allows us to determine the rate of investment allocation according to the equilibrium decisions of investment and savings. Finally, an additional condition is added to the Post Keynesian Growth Model in order to fully characterise the equilibrium path in an extended version of this framework, where capital goods are also needed to produce capital goods.Post-Keynesian growth model, structural change, multi-sector models