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BALANCE OF PAYMENTS‐CONSTRAINED GROWTH IN DEVELOPING COUNTRIES: A THEORETICAL PERSPECTIVE
Author(s) -
Alleyne Dillon,
Francis Alfred A.
Publication year - 2008
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.2008.00299.x
Subject(s) - balance of payments , economics , developing country , growth model , dimension (graph theory) , payment , perspective (graphical) , macroeconomics , current account , variable (mathematics) , net foreign assets , international economics , economic growth , finance , computer science , mathematical analysis , mathematics , artificial intelligence , exchange rate , pure mathematics
The paper clarifies some issues raised in the basic model of balance of payments‐constrained growth due to Thirlwall and later extensions by Thirlwall and Hussain and Moreno‐Brid. The model is also adapted to include both interest payments and net transfers. The latter variable has become very important to many developing countries and brings a new dimension to the analysis. Very importantly, net transfers are positively related to foreign income and negatively related to domestic income. Thus, the paper accounts for dynamic feedback effects, between net transfers, domestic and world income.