THIRLWALL’S CONSTELLATIONS: AN ANALYSIS THE CASE OF LATIN AMERICA, 1992-2020
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Abstract
In this paper, we theoretically and empirically assess the economic growth of Argentina, Brazil, Chile, Colombia, Mexico and Peru during the period 1992-2020, using the theoretical framework of Thirlwall’s (2001) constellations. We estimate the endogenous natural rate of growth, the warranted growth rate and the growth rate consistent with the balance of payments equilibrium, both in its simple and extended version, incorporating capital flows. Our hypothesis is that the selected economies are mainly characterized by an internal growth constraint, reflected in the divergence between the endogenous natural rate of growth and the warranted growth rate. Capital flows, incorporated in the growth rate consistent with the balance of payments equilibrium, have alleviated the external constraint; however, an accelerated economic growth has not been observed in these economies over the last three decades.
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