Economic Modelling 35 (2013) 140–144

Contents lists available at ScienceDirect

Economic Modelling
journal homepage: www.elsevier.com/locate/ecmod

Balance-of-payments constrained growth model for the

Turkish economy
Atilla Gökçe a,⁎, Erhan Çankal b,1
a
Gazi University, Department of Econometrics, 06500 Ankara, Turkey
b
Yildirim Beyazit University, School of Management, Cinnah Cd. 16, 06690 Ankara, Turkey

a r t i c l e i n f o a b s t r a c t

Article history: Economists have investigated the relationship between output and export in order to explain economic
Accepted 18 June 2013 growth for long years. Numerous studies have found very close correspondence between the growth of out-
put and export. It is commonly known that Thirlwall's papers indicate very tight relationship between the
JEL classification:
growth of output and the ratio of the growth of exports to the income elasticity of demand for imports. This
C32
paper aims to apply Thirlwall's balance-of-payments-constrained (BPC) model for the Turkish economy for
F43
O40
1968–2011 period. This research also evaluates the procedures of testing Thirlwall's principle by estimation
of the income elasticity of demand for imports using the test of stationarity and cointegration methods. The
Keywords: findings are in accordance with the Harrod–Thirlwall growth model. The test results of Johansen cointegration
Thirlwall model procedure and the comments on these results are presented as well.
Balance-of-payments constrained growth © 2013 Elsevier B.V. All rights reserved.
model
Johansen cointegration methodology

1. Introduction of Gross Domestic Product (GDP) and ever increasing. International fi-

The main purpose of this study is to test the validity of Thirlwall's
balance-of-payments constrained (BPC) economic growth model for
the Turkish economy. For this purpose, dynamic long-term relationships
between gross domestic product and export will be determined by using
Johansen (1991, 1995) cointegration method that is more preferable in
the literature than the Dickey–Fuller test. The study consists of four
parts such as literature review, theoretical foundation of the Thirlwall
principle, econometric methodology, and empirical findings.
Thirlwall (1979) showed that output and export are closely related
to the elasticity of demand for import. Although he was unaware at the
time, his finding was an estimate of the dynamic Harrod trade multipli-
er. Thirlwall's research showed that the level of income is equal to the
rate of level of export to the marginal propensity to import. Thirlwall
also reminded that the slow and rapid growth rates caused by the
balance of payments would lead to low and high productivity rates
respectively. The countries may sustain their budget deficits financed
by the capital flows in the short run. However, in the long run, they
can hardly finance the capital inflow that is over a certain percentage
⁎ Corresponding author. Tel.: +90 5326528460; fax: +90 3122132036.
E-mail addresses: atilla@gazi.edu.tr (A. Gökçe), ecankal@ybu.edu.tr (E. Çankal).
1
Tel.:+90 5056163680.
nancial authorities push these countries to impose necessary policies to
adjust in such situations. This model has been implemented in many
countries today. Some of the important studies will be discussed in
Section 2.
2. Literature review
Atesoglu (1993a, 1993b, 1994) performed a research and used
Johansen technique in order to test the BPC model for the U.S., Canada,
and Germany. His study showed that export and real income are
cointegrated in the long run. Bairam (1988, 1990, 1993) also contribut-
ed to the literature by testing the model for many countries using
cointegration analysis and supported the hypothesis of BPC growth.
The model was also applied for India by Razmi (2005), for Latin
America by López and Cruz (2000) and Holland et al. (2004), for
Southeast Asia countries by Ansari and Xi (2000), and for Africa and
East Asia countries by Hussain (1999). The findings of these studies
were mostly in favor of the model except for some sub-periods.
Thirlwall and Hussain (1982) studied on an extended model that
allows unbalanced foreign trade along with capital flow in the long
run. Their research on developing countries also led to the results
that supported this extended new model. McCombie and Thirlwall
(1997) tried to move the theory forward. Here, they wanted to
make sure that the long run economic growth can be sustained by
foreign borrowing. The theoretical result indicates that capital flows
will not allow a country's growth to be higher than the rate

0264-9993/$ – see front matter © 2013 Elsevier B.V. All rights reserved.
http://dx.doi.org/10.1016/j.econmod.2013.06.019
 A. Gökçe, E. Çankal / Economic Modelling 35 (2013) 140–144 141

determined by Thirlwall's model. The capital flows will not be longer arranging Eq. (1) for Z and replace it in Eq. (4) gives
than the duration determined by Thirlwall either. Later, Elliot and


Rhodd (1999) and Thirlwall and Hussain (1982) showed that more Y t ¼ ½ð1=πÞð1−α Þ P dt −P ft þ ð1=πÞX t : ð5Þ
advanced estimations can be obtained including the effect of borrow-
ing using the same countries and time period.
Moreno-Brid (1998–99) contributed to the extended BPC growth When relative prices are measured in the same monetary units,
model developed by Thirlwall and Hussain in 1982 by including the they will be constant and their difference will be equal to zero
restriction that the current account deficit is constant in the long according to the Marshall–Lerner condition. Hence, the Eq. (5) can
run. If the capital flows are permitted but the current deficit relative be rewritten as:
to domestic income remains constant, then Thirlwall's basic princi-
ples will still be valid. Similarly, McCombie and Roberts (2002), Y t ¼ ð1=πÞX t : ð6Þ
argued that under reasonable assumptions related to sustainable net
foreign capital inflows as the rate of national income, the capital
Eq. (6) shows Harrod foreign-trade multiplier relation, where (1/π)
inflows in the BPC growth model do not make a great contribution
is a foreign-trade multiplier. The economic growth model with the
in loosening the balance of payments restriction. However, according
balance of payments constrained is called Thirlwall model. The model
to Barbosa-Filho (2001), the contribution of Moreno-Brid (1998–99)
is a different version of Harrod's foreign trade multiplier. The Thirlwall
has two limitations; namely, the model with the BPC is not necessary
model shown in Eq. (6) indicates that the growth rate with the
to be stable and it does not distinguish the interest payments from
constrained balanced of payments in the long-run is obtained by divid-
nonfactor services and good imports. So, Barbosa-Filho (2001) ex-
ing the export (or the export growth rate) by the income elasticity of
tended the model to allow a sustainable foreign borrowing by taking
demand for imports.
into account the effects of interest rates. Moreno-Brid (2003) argued
that Thirlwall's principle does not take the interest payments to
4. Data, model, and methodology
borrowed countries into account without referring to the studies
done by Elliot and Rhodd (1999) and Barbosa-Filho (2001). They de-
Real exports and real income have been moving together, which re-
veloped a BPC model that contained interest payments. The model
veals that these series may be cointegrated. An empirical confirmation
was implemented for the Mexican economy and the results were
of the Harrod–Thirlwall model requires the account of balance to be
found to be supportive of the model.
consistent with data. In the long-run output should be cointegrated
The Thirlwall model has still been investigated for various coun-
with export, where (1/π) is the cointegration coefficient. In this
tries. There is an increasing number of empirical studies on this topic.
study, the objective is to test the presence of long term relationship
between the variables in Eq. (6) using Johansen (1991, 1995)
3. Theoretical framework
cointegration method. Here, (1/π) is a cointegration parameter as men-
tioned previously. Johansen's methodology ascribes to the fundamen-
Thirlwall model (1979) expresses the long-term economic growth
tals of VAR methodology and uses maximum likelihood ratio test. In
via the dynamic Harrod foreign trade multiplier. According to the
the first step, the order of cointegration of the series is determined
model, demand side factors are primary actors on economic growth
with the augmented Dickey–Fuller (ADF) test. When the long-term
and the dominant constraint on demand is the balance of payments.
equilibrium relationship is revealed by the Johansen cointegration
The primary aim of the Thirlwall model (1979) is to bring a light on
method, the hypothesis of the Thirlwall model will not be rejected
how the balance of payments may affect the countries' performances
and the validity of the model for Turkish Economy will be proved.
on economic growth. Thirlwall model is expressed by the following
The Thirlwall model is estimated for the Turkish economy using
three equations:
the annual data for 1968–2011 period. The Johansen cointegration

 analysis is performed between GDP and export for this period. The
X t ¼ φ P dt −P ft þ ρZ t ð1Þ Johansen cointegration methodology is employed in order to show
the long-run relationship between GDP and export. GDP and export

 series are used at their current values in million dollars. The series
Mt ¼ α P dt −P ft þ πY t ð2Þ are in their natural logarithmic forms.
The data taken from the World Bank shows the movements of
X t þ P dt ¼ Mt þ pft : ð3Þ lnGDP and lnexport in time on Graph 1.

Here, ρ, π, α N 0 and φ b 0. X is the growth rate of export and M is 16

the growth rate of import. Z is the rate of increase in the world in-
14
come and Y is the rate of increase in the gross domestic product of
the relevant country. ρ and π are the elasticities of export and import 12
with respect to income respectively. φ and α denote the export and
10
import elasticities to demand respectively. Since pd and pf represent
domestic and world prices then (pd − pf) represents relative prices. 8 lnGDP
Eqs. (1) and (2) are the export and import equations and Eq. (3) is
the current account balance. Here, the sizeable impact of differences 6 lnexport
between the elasticities of export and import to income on the eco- 4
nomic growth is taken into consideration (McCombie and Thirlwall,
1997). 2
If Eq. (3) is solved for GDP, the following equation can be written
0
as
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010


Y t ¼ ½ð1 þ φ−α Þ=π P dt −P ft þ ðρ=πÞZ t ð4Þ
Graph 1. lnGDP and lnexport for the Turkish Economy (1968–2011).
142 A. Gökçe, E. Çankal / Economic Modelling 35 (2013) 140–144

As it can be seen on Graph 1, there is a steadily increase in export. Table 2

The effect of European sovereign-debt crisis can also be clearly seen The determination of time lag length of the VAR model.

on the Turkish export after 2009. The path of export seems to grow Lags logL LR FPE AIC SCI HQ
more steadily compared to that of GDP.
0 −65.45654 NA 0.145418 3.747585 3.835559 3.778290
Two break tests of Lee and Strazicich (2003) are applied to lnGDP 1 39.68680 192.7628a 0.000528a −1.871489a −1.607569a −1.779374a
and lnexport series. However, the breaks that are statistically significant 2 40.78217 1.886472 0.000622 −1.710121 −1.270254 −1.556595
could not be found. Eviews 7.0 and Gauss 6.0 programs are used in order 3 41.66481 1.422030 0.000745 −1.536934 −0.921121 −1.321999
4 42.43430 1.154232 0.000901 −1.357461 −0.565702 −1.081116
to determine the breaks and to obtain the Johansen cointegration esti-
5 47.75517 7.390099 0.000853 −1.430843 −0.463137 −1.093087
mations, and to perform the other time series analyses. 6 54.92190 9.157492 0.000736 −1.606772 −0.463120 −1.207607
7 55.61844 0.812632 0.000920 −1.423247 −0.103648 −0.962672
4.1. Johansen methodology 8 60.09057 4.720581 0.000947 −1.449476 0.046069 −0.927491

logL: logarithmic likelihood, FPE: final prediction error, AIC: Akaike information
Johansen's methodology takes its starting point in the vector criteria, SIC: Schwarz information criteria, and HQ: Hannan–Quinn criteria.
a
autoregression (VAR) of order p given by Optimum lag lengths are shown in bold.

yt ¼ μ þ A1 yt−1 þ ⋯ þ Ap yt−p þ εt
where yt is an n × 1 vector of variables that is integrated of order one,
which is denoted as I(1) and εt is an n × 1 vector of innovations. This
VAR can be rewritten as
X
p−1
Δyt ¼ μ þ Πyt−1 þ Γt Δyt−1 þ εt
i¼1
where Π = ∑ pi = 1Ai − I and Γi = − ∑ pj = i + 1Ai.
If the coefficient matrix Π has reduced rank r b n, then there exist
n × r matrices α and β each with rank r such that Π = αβ′ and β′yt is
stationary. r is the number of cointegrating relationships, the
elements of α are known as the adjustment parameters in the vector
error correction model and each column of β is a cointegrating vector.
It can be shown that for a given r, the maximum likelihood estimator
of β defines the combination of yt − 1 that yields the largest canonical
correlations of Δyt with yt − 1 after correcting for lagged differences
and deterministic variables when they present. Johansen proposes
two different likelihood ratio tests of the significance of these canon-
ical correlations and thereby the reduced rank of the Π matrix: the
trace test and maximum eigenvalue tests are shown in Eqs. (7) and
(8) respectively.
X
n
 namely, the model has VAR (1) structure. The goodness of fit tests for
λtrace ¼ −T ^
ln 1−λ
i residuals are performed following VAR (1) estimation. Breusch–
i¼rþ1


^
λmax ¼ −T ln 1−λ
rþ1
Here, T is the sample size and λ^ i is the ith largest canonical correla-
tion. The trace test tests the null hypothesis of r cointegrating vectors
against the alternative hypothesis of n cointegrating vectors. The
maximum eigenvalue test, on the other hand, tests the null hypothesis
of r cointegrating vectors against the alternative hypothesis of r + 1
cointegrating vectors. Neither of these test statistics follows a chi
square distribution in general; asymptotic critical values can be found
in Johansen and Juselius (1990).
It is known that most of the time series are not stationary at their
own levels and that the cointegration can occur at different orders. Em-
pirical studies have shown that economic series are usually integrated
at order one. Before starting the Johansen cointegration method, the
order of cointegration of the series has to be known. However, two
series are integrated of different orders, they cannot be cointegrated.
Therefore, the first step in testing a time series model is to determine
the order of integration by means of testing for unit roots. Hence,
ADF unit root test is employed and its results are presented in Table 1.
5. Findings
According to ADF test, while H0 is accepted at the log levels of GDP
and export series, H0 is rejected at first differences at 1% significance
level. Based on this result, the first differences of the series are
stationary and integrated of order one. In this situation, the long-run
relationship of the series can be investigated. The structure of I(1) of
the series represents the growth rates of the variables and consistent
with the Thirlwall rule. A crucial determination in using the Johansen
procedure is the lag length. The first step of the Johansen cointegration
analysis is to estimate unconstrained VAR (p) model and determine the
lag length. Hence, the VAR model is estimated and the lag lengths are
summarized in Table 2.
All the criteria have shown that the appropriate lag-length is 1,
ð7Þ
Godfrey Lagrange Multiplier (LM) is used to test for autocorrelation in
residuals and Jarque–Bera tests for normality. Based on the test results,
ð8Þ
autocorrelation does not exist for 12 lags in residuals (Appendix 1). The
normality test shows that the variables have normal distributions both
individually and jointly (Appendix 2). Whether the model is stable or
not have also been investigated in addition to the tests. For the VAR
model to have a stable structure, inverse roots of characteristic polynom
of AR should be within unit circle. That all AR roots are in the unit circle
shows that the estimated model is stable (Appendix 3 and Appendix 4).
Table 3
Johansen cointegration test.

λtrace statistics
Table 1
Augmented Dickey–Fuller test results. Hypothesis Eigenvalues λtrace 0.05 p
a
H0 : r = 0, H1 : r ≥ 1 0.542104 37.41915 20.26184 0.0001
Variables k ADF test statistics (τ) k ADF test statistics (τ)
H0 : r ≤ 1, H1 : r ≥ 2 0.085246 3.831316 9.164546 0.4378
(intercept) (intercept with trend)

ln Yt 0 −0.352691 [−3.592462] 0 −2.387948 [−4.186481] λmax statistics

ln Xt 0 −1.507157 [−3.592462] 0 −1.848831 [−4.186481]
Hypothesis Eigenvalues λmax 0.05 p
Δ ln Yt 0 −6.464508 [−3.596616]a 0 −6.385545 [−4.192337]a
Δ ln Xt 0 −6.050955 [−3.596616]a 0 −6.266660 [−4.192337]a H0 : r = 0, H1 : r = 1 0.542104 33.58784 a
15.89210 0.0000
H0 : r ≤ 1, H1 : r = 2 0.085246 3.831316 9.164546 0.4378
Notes: Y and X represent GDP and export respectively. H0: the relevant series has unit
a
root. The numbers in brackets are t statistics that are significant at 1% level. k denotes Denotes rejection of the hypothesis at 5% level based on MacKinnon et al. (1999)
the appropriate lag order according to Schwartz information criteria. p-values. Trace and max-eigenvalue tests indicate one cointegrating equation both 5%
a
Stationary at 1% level. level.
 A. Gökçe, E. Çankal / Economic Modelling 35 (2013) 140–144 143

Table 4 deviate its long-run equilibrium growth rate. According to Thirlwall,

The results of Johansen cointegration analysis with normalized cointegrating the most important factors in obtaining the balance in the globalized
coefficients.
world are export and import. The growth rate in the long-run is de-
Sample period Intercept lnexport termined by the growth rate in export and the income elasticity of
1968−2011 10.0973 0.3839 import. One of the most crucial factors that affect the growth in an
[5.6650]a [2.0808]b economy is the changes in growth rate of export. There is an inverse
Notes: lnGDP is the dependent variable. No deterministic trend in the data in the model 2. relationship between the income elasticity of import and the volume
a
The numbers in brackets are the t values, significant at 1% level. of export. In other words, as the income elasticity of import increases,
b
The numbers in brackets are the t values, significant at 5% level. the positive impact of export on GDP growth declines.
The Thirlwall model has been estimated using the data for 1968–
2011 period for the Turkish economy. In order to do this, Johansen
Table 5 cointegration analysis between the GDP and export is performed.
Thirlwall law: country implications. Based on the estimation results, statistically significant positive rela-
Countries (1/π) π tionship has been found between lnGDP and lnexport. The findings
Turkey (1968−2011) 0.3839 2.6048
have proven that the Thirlwall's balance-of-payments-constrained
Brazil (1955−1998) 0.4200 2.3800 growth model is valid for the Turkish economy. The income elasticity
Mexico (1976−1996) 0.3780 2.6455 of import for the Turkish economy is estimated at 2.6048. The reduc-
Argentina (1965−1996) 0.4100 2.4390 tions in this value of the elasticity will accelerate the growth in GDP.
Netherlands (1953 −1976) 0.5494 1.8200
This will clearly occur not because of the rises in import but the
Sweden (1953−1976) 0.5681 1.7600
USA (1950 −1994) 0.4880 2.0491 rises in domestic supply. So, this may arise if the domestic demand in-
Bolivia (1953−2002) 0.4641 2.1547 creases can be fulfilled not by rises in import but rises in domestic
Colombia (1960 −2005) 1.7000 0.5882 production (supply) in an increasing rate. This study verifies the va-
India (1950−1999) 0.3140 3.1847 lidity of Harrod–Thirlwall growth model for the Turkish economy.
S. Korea (1973−1995) 1.4285 0.7000

Appendix 1. VAR Residual Serial Correlation LM Tests*

To determine the number of cointegrating vectors and Π matrix,
λtrace and λmax statistics, which are given Eqs. (7) and (8), are used
based on Johansen (1991, 1995).2 Table 3 exhibits the Johansen
cointegration test results.
By looking at Table 3, we conclude that the null hypothesis of no
cointegration between two variables that enter in Eq. (6) can be Lags LM-stat p
rejected at the 5% level of significance by both λtrace and λmax tests 1 2.179815 0.7027
in 1968–2011 period. So, the rank of Π matrix is one and lnGDP and 2 1.850948 0.7631
lnexport have one cointegrating vector. Table 4 presents the results 3 0.571607 0.9662
of Johansen cointegration analysis for lnGDP and lnexport. 4 7.848113 0.0973
5 6.198471 0.1848
Statistically significant and positive relationship is found between 6 1.766792 0.7786
lnGDP and lnexport based on the estimation results. These findings 7 0.208449 0.9949
have proved the validity of Thirlwall's BPC growth model for the 8 6.279008 0.1793
Turkish economy. The coefficient of lnexport gives the long-term 9 3.199476 0.5250
10 1.201392 0.8779
elasticity of GDP with respect to export as shown in Eq. (6) [(1/π) =
11 3.316029 0.5064
0.3839]. This coefficient is called as the Harrod foreign-trade multiplier. 12 3.113744 0.5390
The estimated long-run elasticity is finally used to calculate the in-
*H0: no serial correlation at lag order k.
come elasticity of demand for import ðπ^ ¼ 2:6048Þ. According to the
result, a percentage rise in GDP will increase imports by nearly 2.6%.
This result concludes that demand for imports is highly sensitive to Appendix 2. VAR residual normality tests*
output growth. The results of the earlier studies of Thirlwall's BPC
growth model for some selected countries are exhibited in Table 5.
The findings of this research show similarities for the countries
Component Jarque–Bera df p
that have similar economic structures. It is clear from the results
that increase in income elasticity of demand for imports will reduce 1 2.314792 2 0.3143
2 0.029346 2 0.9854
the positive effect of export on GDP growth. Joint 2.344138 4 0.6727

*H0: residuals are multivariate normal.

6. Conclusion Orthogonalization: Cholesky (Lutkepohl).

Thirlwall's balance-of-payments-constrained growth model and

the resulting Thirlwall rule has adopted the post Keynesian theory
and created a policy model that has suggested controls for export Appendix 3. Roots of characteristic polynomial
and import. Based on Thirlwall model, different growth rates amongst
nations can be attributed to the differences in demands. The principal
factor that limits growth in an open economy is the balance of pay-
ments. It emphasizes that a country's sustainable growth should not
Root Modulus
2
The five separate models have been tried based on Pantula principle in conducting
0.980343 0.980343
the Johansen cointegration test and decided the model 2 to be the most appropriate
0.831783 0.831783
(no deterministic trend but intercept).
144 A. Gökçe, E. Çankal / Economic Modelling 35 (2013) 140–144

Appendix 4. Inverse roots of characteristic polynomial Bairam, E.I., 1990. The Harrod trade multiplier revisited. Applied Economics 22,
711–718 (June).
Bairam, E.I., 1993. Static versus dynamic specification and the Harrod foreign trade
Inverse Roots of AR Characteristic Polynomial multiplier. Applied Economics 25, 739–742.
1.5 Barbosa-Filho, N., 2001. The balance-of-payments constraint: from balanced
trade to sustainable debt. Banca Nazionale del Lavoro Quarterly Review 219,
381–400 (December).
Elliot, D., Rhodd, R., 1999. Explaining growth rate differences in highly indebted countries:
1.0 an extension to Thirlwall and Hussain. Applied Economics 31.
Holland, M., Vieira, F., Canuto, O., 2004. Economic growth and the balance-of-payments
constraint in Latin America. Investigacion Economica LXIII, 45–74.
0.5 Hussain, M.N., 1999. The balance-of-payment constraint and growth rate differences
among African and East Asian economies. African Development Review vol. 11,
103–137 (African Development Bank).
Johansen, S., 1991. Estimation and hypothesis testing of cointegration vectors in Gaussian
0.0 vector autoregressive models. Econometrica 55, 1551–1580.
Johansen, S., 1995. Likelihood-based Inference in Cointegrated Vector Autoregressive
Models. Oxford University Press, Oxford.
-0.5 Johansen, S., Juselius, K., 1990. Maximum likelihood estimation and inferences on
cointegration—with applications to the demand for money. Oxford Bulletin of
Economics and Statistics 52, 169–210.
Lee, J., Strazicich, M., 2003. Minimum Lagrange multiplier unit root test with two struc-
-1.0 tural breaks. The Review of Economics and Statistics 85 (4), 1082–1089.
López, J., Cruz, A., 2000. Thirlwall's law and beyond: the Latin American experience.
Journal of Post Keynesian Economics 22 (3), 477–495.
-1.5 MacKinnon, J.G., Haug, A., Michelis, L., 1999. Numerical distribution functions of likelihood
ratio tests for cointegration. Journal of Applied Econometrics 14 (5), 563–577.
-1.5 -1.0 -0.5 0.0 0.5 1.0 1.5
McCombie, J., Roberts, M., 2002. The role of balance of payments in economic growth.
The Economics of Demand-Led Growth.Edward Elgar, MA.
McCombie, J., Thirlwall, A., 1997. The dynamic Harrod foreign trade multiplier and the
demand oriented approach to economic growth—an evaluation. International
References Review of Applied Economics 11, 1.
Moreno-Brid, J.C., 1998–99. On capital flows and the balance-of-payments constrained
Ansari, H., Xi, Y., 2000. The chronicle of economic growth in Southeast Asian countries: growth model. Journal of Post Keynesian Economics 21.
does Thirlwall's law provide an adequate explanation. Journal of Post Keynesian Moreno-Brid, J.C., 2003. Capital flows, interest payments and the balance-of-payments
Economics 22 (4), 573–588 (summer). constrained growth model: a theoretical and empirical analysis. Metroeconomica
Atesoglu, H.S., 1993a. Balance of payments constrained growth: evidence from the 54 (2–3), 346–365.
United States. Journal of Post Keynesian Economics 15, 507–514 (Summer). Razmi, A., 2005. Balance of payments constrained growth model: the case of India. De-
Atesoglu, H.S., 1993–4b. Exports, capital flows, relative prices and economic growth in partment of Economics, University of Massachesetts Amherst, Working Paper
Canada. Journal of Post Keynesian Economics 16 (2), 289–297 (Winter). 2005-05.
Atesoglu, H.S., 1994. An application of a Kaldorian export-led model of growth to the Thirlwall, A.P., 1979. The balance of payments constraint as an explanation of international
United States. Applied Economics 26, 479–483 (January). growth rate differences. Banca Nazionale del Lavoro Quarterly Review 45–53.
Bairam, E.I., 1988. Balance of payments, the Harrod foreign trade multiplier and eco- Thirlwall, A.P., Hussain, M.N., 1982. The balance of payments constraint, capital flows,
nomic growth: the European and North American experience, 1970–85. Applied and growth rate differences between developing countries. Oxford Economic Pa-
Economics 20, 1635–1642. pers 34 (10), 498–509.