Growth trajectories and political economy in a Structuralist open economy model

Porcile, Gabriel and Spinola, Danilo and Giuliano, Yajima (2022) Growth trajectories and political economy in a Structuralist open economy model. Review of Keynesian Economics. ISSN 2049-5323 (In Press)

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Abstract

This paper presents a set of growth and distribution models for open developing economies under different political economy regimes. These regimes give rise to different institutional frameworks which in turn shape macroeconomic outcomes. We focus on three cases: (1) a pure developmentalist state, (2) conflicting claims between workers and government, and (3) an open capital account under a neoliberal coalition. The equilibrium growth rate is defined by the Balance-of-Payments (BOP) constraint. Cumulative causation à la Kaldor in periods in which the depreciation of the real exchange rate temporarily raises the equilibrium growth rate allows (under certain conditions) for a process of learning that transforms the income elasticity of exports and hence the BOP-constrained rate of growth in the long run. The model produces a variety of outcomes that explains some of the contradictory results reported in the empirical literature in terms of different constellations of power and institutions.

Item Type: Article
Dates:
DateEvent
15 June 2022Accepted
Uncontrolled Keywords: Structural Change, Growth models, Structuralist models, BOP-constrained growth.
Subjects: CAH15 - social sciences > CAH15-02 - economics > CAH15-02-01 - economics
Divisions: Faculty of Business, Law and Social Sciences > Birmingham City Business School > Centre for Applied Finance and Economics
Faculty of Business, Law and Social Sciences > Birmingham City Business School > Department of Accounting, Finance and Economics
Depositing User: Danilo Sartorello Spinola
Date Deposited: 31 Aug 2022 14:48
Last Modified: 31 Aug 2022 14:48
URI: https://www.open-access.bcu.ac.uk/id/eprint/13508

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