Open AccessInternational Trade And Income Formation: A Developing Countrys Perspective
Author(s) -
Douglas K. Agbetsiafa
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v3i1.6542
Subject(s) - economics , balance of payments , monetary economics , developing country , international economics , volatility (finance) , current account , stock (firearms) , capital account , capital (architecture) , macroeconomics , exchange rate , financial economics , mechanical engineering , engineering , economic growth , archaeology , history
Using OLS technique, this paper estimates the role of the international sector of developing economies on the monetary mechanism and economic growth. Results obtained show that significant variation in money stock is explained by changes in exports, capital inflow, and the balance of payments. However volatility in these variables, due to the narrow range of exports and international capital market conditions for such economies, present real limits to growth, and cautions against indiscriminate use of bank credit creation.