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A structural economic dynamics approach to balance-of paymentsconstrained growth
Ricardo Azevedo Araujo and Gilberto Tadeu Lima*
This paper derives a balance-of-payments equilibrium growth rate analogous toThirlwall’s Law from a Pasinettian multi-sector macrodynamic framework. Theresulting formula, which we call the Multi-代写留学生论文Sectoral Thirlwall’s Law, asserts that
a country’s growth rate of per capita income is directly proportional to the growthrate of its exports, with such a proportionality being inversely (directly) related tosectoral income elasticities of demand for imports (exports). These incomeelasticities are weighted by coefficients that measure the share of each sector in
total imports and exports, respectively. It is shown that several theoretical, empiricaland policy implications can be drawn from such a structural economic dynamicsapproach to balance-of-payments-constrained growth.
Key words: Structural economic dynamics, Foreign trade multiplier, Balance-ofpayments-constrained growth, Uneven development

JEL classifications: O19, F12
1. Introduction
The role played by aggregate demand in the determination of the level of economic activityis a contentious issue. While aggregate demand is asserted to interact with aggregate supplyto determine output and employment in the short run in most macroeconomic models, it is
only in some non-neoclassical macroeconomic models that the long-run performance ofeconomic activity is asserted to be determined by aggregate demand as well. Indeed, neoclassicaltheories of economic growth—both in the original version developed by Solow
(1956) and in the several endogenous-growth versions that have been developed since themid-1980s (see Aghion and Howitt, 1998, for a review)—assume that the growth rate ofper capita income is determined solely by supply-side factors. These incarnations of the
neoclassical growth theory, by assuming that, in the long run, productive capacity in termsof capital and labour is always fully utilised, actually assume away the very possibility ofgrowth being affected by effective demand.
Manuscript received 8 May 2006; final version received 14 February 2007.
Addresses for correspondence: Ricardo Azevedo Araujo; email: rsaaraujo@pos.ucb.br; Gilberto Tadeu Lima;
email: giltadeu@usp.br
* Catholic University of Brası´lia; and University of Sa˜o Paulo, respectively. We should like to thank
Anthony Thirlwall and two anonymous referees for their helpful comments on an earlier draft of this paper;however, any remaining errors are our own. Gilberto Tadeu Lima gratefully acknowledges research funding
granted by the Brazilian National Council of Scientific and Technological Development (CNPq).Cambridge Journal of Economics 2007, 31, 755–774
doi:10.1093/cje/bem006
Advance Access publication 15 May, 2007

The Author 2007. Published by Oxford University Press on behalf of the Cambridge Political Economy Society.
All rights reserved.
I
n
1
i¼1
ðainþjai ˆnÞani ¼1 ð1Þ
where ain and ai ˆn stand for the per capita demand coefficients of final commodity i, with i ¼
1,2, . . . n–1. W
+
n
1
i¼1
ðainþaˆinÞani ¼1 ð2Þ
where aˆin is the per capita import demand coefficient for commodity i produced in country
A. The equilibrium in trade balance is given by:
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