Abstract
This chapter contemplates the robustness of Thirlwall’s Law, a parsimonious expression that relates long-run equilibrium growth in any one region to the product of world income growth and the ratio of the income elasticities of demand for exports and imports.* Various extensions of the balance of payments constrained growth model from which Thirlwall’s Law is derived are examined. In each case, Thirlwall’s Law is shown to reassert itself as a good approximation of the equilibrium growth rate. It is hypothesized that this robustness helps explain the widespread empirical success of Thirlwall’s Law.
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© 2012 Mark Setterfield
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Setterfield, M. (2012). The Remarkable Durability of Thirlwall’s Law. In: Soukiazis, E., Cerqueira, P.A. (eds) Models of Balance of Payments Constrained Growth. Palgrave Macmillan, London. https://doi.org/10.1057/9781137023957_4
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DOI: https://doi.org/10.1057/9781137023957_4
Publisher Name: Palgrave Macmillan, London
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