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Trigg, Andrew B.
(2020).
DOI: https://doi.org/10.1186/s40008-020-0178-7
Abstract
A notable macroeconomic explanation of uneven development, with particular relevance to developing countries, has been the problem of balance of payments constraints, as captured by Thirlwall’s Law: where relative growth rates are explained by differences between income elasticities for exports and imports. Araujo and Lima have formulated a one-country multisectoral disaggregation of this hypothesis using a vertically integrated input–output framework, which is extended here in two main ways. First, international trade in intermediate inputs—the basis for Global Value Chains—is introduced; second, the model is extended to multiple countries. The main outcome of the paper is the development of a new multisectoral method for modelling balance of payments constraints: a Multi-Country Sectoral Thirlwall Law (MCSTL) under which key sector relationships are nested in intercountry trading relationships that encompass both intermediate and final goods. The identification of this input–output structure is developed in analytical stages, moving from a one-country vertically integrated system, to two, three and finally multi-country systems. In addition to its theoretical contribution to understanding the industrial structure of trade, an implication of this multi-country/multi-sector approach is that it can also be tested in future empirical work using the recently available World Input–Output Database of national tables.
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About
- Item ORO ID
- 71191
- Item Type
- Journal Item
- ISSN
- 2193-2409
- Project Funding Details
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Funded Project Name Project ID Funding Body The Open University (OU) Not Set The Open University (OU) - Keywords
- Uneven development; Thirlwall's Law; Global Value Chains; Input-output analysis; Vertical integration; Trade in value added
- Academic Unit or School
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Faculty of Arts and Social Sciences (FASS) > Social Sciences and Global Studies > Economics
Faculty of Arts and Social Sciences (FASS) > Social Sciences and Global Studies
Faculty of Arts and Social Sciences (FASS) - Research Group
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Global Challenges and Social Justice - Copyright Holders
- © 2020 Andrew Trigg
- Depositing User
- Andrew Trigg