| Abstract: | This paper derives a balance-of-payments equilibrium growthrate analogous to Thirlwall's Law from a Pasinettian multi-sectormacrodynamic framework. The resulting formula, which we callthe Multi-Sectoral Thirlwall's Law, asserts that a country'sgrowth rate of per capita income is directly proportional tothe growth rate of its exports, with such a proportionalitybeing inversely (directly) related to sectoral income elasticitiesof demand for imports (exports). These income elasticities areweighted by coefficients that measure the share of each sectorin total imports and exports, respectively. It is shown thatseveral theoretical, empirical and policy implications can bedrawn from such a structural economic dynamics approach to balance-of-payments-constrainedgrowth. |
