A structural economic dynamics approach to balance-of-payments-constrained growth

Abstract

It is derived a balance-of-payments equilibrium growth rate analogous to Thirlwall´s Law from a Pasinettian multi-sector macrodynamic framework.The resulting formula, which we call Multi-Sectoral Thirlwall´s Law, asserts that the growth rate of per capita income is directly proportional to the growth rate of exports, such a proportionality being inversely (directly) related to sectoral income elasticities of imports (exports).These elasticities are weighted by the share of each sector in aggregate imports and exports, respectively.Several relevant theoretical, empirical and policy implications can be drawn from such a structural dynamics approach to balance-of-payments-constrained growth.

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