Abstract

OREIRO, José Luis. Thirlwall’s Law And New-Developmentalism: What Are The Limits For Long-Run Growth?. Inv. Econ [online]. 2023, vol.82, n.326, pp.98-126.  Epub Dec 08, 2023. ISSN 0185-1667.  https://doi.org/10.22201/fe.01851667p.2023.326.86496.

The aim of this article is to argue that New-Developmentalism -understood as an approach to the deep determinants of economic development in which macroeconomic policy regime has a key role in explaining the long-term growth differentials among countries, notably middle-income countries- is not incompatible with Balance of Payments Constrained Growth models pioneered and developed by Professor Thirlwall, but can be considered an extension and improvement of such a class of models in order to incorporate structural change induced by exchange rate overvaluation as the main limit of long-run growth for middle-income dual economies, thereby explaining the so-called middle-income trap.

Keywords : Anthony Thirlwall; economic growth; real exchange rate; structural change; O11; O14; O24.