Thirlwall´s law and foreing capital in Brazil

OCTAVIANO CANUTO, ALEX LUIZ FERREIRA

Resumen


THIS PAPER ADDRESSES THE HYPOTHESIS OF BALANCE OF PAYMENTS CONSTRAINT TO INCOME GROWTH IN BRAZIL THROUGH AN EXTENDED VERSION OF ”THIRLWALL´S LAW” [THIRLWALL (1979)] THE PERIOD COVERED BY THE TESTS IS FROM 1949 TO 1999. WE AIM TO COMPLEMENT EXISTING APPLICATIONS OF OPEN-ECONOMY KEYNESIAN MODELS TO BRAZIL BY EXPLICITLY INTRODUCING THE EFFECTS OF NET PAYMENTS OF INTEREST, DIVIDENS AND PROFITS (OF THE BALANCE OF PAYMENT´S CURRENT ACCOUNT) ON THE DOMESTIC INCOME GROWTH RATE. ADDITIONALLY, THE PAPER PRESENTS A TEST OF GRANGER CAUSALITY REGARDING, ON THE ONE HAND, INCOME-ELASTICITIES OF EXPORTS AND IMPORTS AND ON THE OTHER, ECONOMIC GROWTH. OUR FINDINGS DO NOT REJECT THE HYPOTHESIS UNDERLYING THIRLWALL´S GROWTH LAW.

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                                     ISSN: 0186-2901