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Thirlwall''s Law at 40
2019 marked the 40th anniversary of the publication of Anthony P. Thirlwall’s classic paper that laid out what became known as Thirlwall’s law. This article introduced and provided empirical evidence in favor of the proposition that the long-run rate of growth of an economy compatible with balance-of-payments equilibrium can be approximated by the simple rule of the ratio of the growth of exports to the income elasticity of demand for imports.
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More Information
2019 marked the 40th anniversary of the publication of Anthony P. Thirlwall’s classic paper that laid out what became known as Thirlwall’s law. This article introduced and provided empirical evidence in favor of the proposition that the long-run rate of growth of an economy compatible with balance-of-payments equilibrium can be approximated by the simple rule of the ratio of the growth of exports to the income elasticity of demand for imports.
Thirlwall’s law provides a theoretical underpinning for several of the arguments traditionally espoused by the heterodox followers of Keynes. In addition, Thirlwall’s law can also be viewed as a guide to policy-making. It has spurred a rich research agenda at both the theoretical and empirical levels. Theoretically the core model has been extended to include the different components of the current account of the balance of payments. Empirically, it has withstood the test of time and has been corroborated, with perhaps a few exceptions, for a variety of developed and developing countries under different historical contexts and different periods of time.
This re-release of the special issue of the Review of Keynesian Economics brings together experts and researchers to present the latest developments and debates on Thirlwall’s law. Students, economists and policy makers will find this volume enlightening.
Thirlwall’s law provides a theoretical underpinning for several of the arguments traditionally espoused by the heterodox followers of Keynes. In addition, Thirlwall’s law can also be viewed as a guide to policy-making. It has spurred a rich research agenda at both the theoretical and empirical levels. Theoretically the core model has been extended to include the different components of the current account of the balance of payments. Empirically, it has withstood the test of time and has been corroborated, with perhaps a few exceptions, for a variety of developed and developing countries under different historical contexts and different periods of time.
This re-release of the special issue of the Review of Keynesian Economics brings together experts and researchers to present the latest developments and debates on Thirlwall’s law. Students, economists and policy makers will find this volume enlightening.
Contents
Contents:
Symposium: Thirlwall’s Law at 40
Thirlwall’s law at 40 1
Esteban Pérez Caldentey and Matías Vernengo
Why Thirlwall’s law is not a tautology: more on the debate over the law 3
J.S.L. McCombie
Endogenous growth, capital accumulation and Thirlwall’s dynamics: the
case of Latin America 18
Ignacio Perrotini-Hernández and Juan Alberto Vázquez-Muñoz
Thirlwall’s law and the terms of trade: a parsimonious extension of the
balance-of-payments-constrained growth model 37
Esteban Pérez Caldentey and Juan Carlos Moreno-Brid
Thirlwall’s law, external debt sustainability, and the balance-ofpayments-
constrained level and growth rates of output 60
Gustavo Bhering, Franklin Serrano and Fabio Freitas
Growth transitions and the balance-of-payments constraint 72
Excellent Mhlongo and Kevin S. Nell
New Structuralism and the balance-of-payments constraint 91
Gabriel Porcile and Giuliano Toshiro Yajima
Is Indonesia’s growth rate balance-of-payments-constrained? A timevarying
estimation approach 111
Jesus Felipe, Matteo Lanzafame and Gemma Estrada
Thoughts on balance-of-payments-constrained growth after 40 years 128
A.P. Thirlwall
Symposium: Thirlwall’s Law at 40
Thirlwall’s law at 40 1
Esteban Pérez Caldentey and Matías Vernengo
Why Thirlwall’s law is not a tautology: more on the debate over the law 3
J.S.L. McCombie
Endogenous growth, capital accumulation and Thirlwall’s dynamics: the
case of Latin America 18
Ignacio Perrotini-Hernández and Juan Alberto Vázquez-Muñoz
Thirlwall’s law and the terms of trade: a parsimonious extension of the
balance-of-payments-constrained growth model 37
Esteban Pérez Caldentey and Juan Carlos Moreno-Brid
Thirlwall’s law, external debt sustainability, and the balance-ofpayments-
constrained level and growth rates of output 60
Gustavo Bhering, Franklin Serrano and Fabio Freitas
Growth transitions and the balance-of-payments constraint 72
Excellent Mhlongo and Kevin S. Nell
New Structuralism and the balance-of-payments constraint 91
Gabriel Porcile and Giuliano Toshiro Yajima
Is Indonesia’s growth rate balance-of-payments-constrained? A timevarying
estimation approach 111
Jesus Felipe, Matteo Lanzafame and Gemma Estrada
Thoughts on balance-of-payments-constrained growth after 40 years 128
A.P. Thirlwall
