Vol1 1 2 emiliolinthondelgadomultisectorial

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MULTISECTORAL THIRLWALL’S LAW: EVIDENCE FROM ECUADOR (1987-2008) Diego Linthon Delgado1 Volumen 1, No.1 Enero-Junio 2015 ISSN 2448-5454

Siguiendo la metodología de Sanjaya Lall (2000), los bienes son clasificados de acuerdo al grado de intensidad tecnológica incorporado en su producción. Los resultados de los coeficientes, de las funciones generalizadas de impulsorespuesta y la descomposición de la varianza indican que los bienes con mayor contenido tecnológico tienen mayor elasticidad ingreso por lo que su impacto en la balanza de pagos es ABSTRACT mayor. Concluimos que el crecimiento económiUsing a vector error correction model (VECM), we co del Ecuador está restringido por su balancalculated income elasticity of exports and imports za de pagos, de acuerdo con la ley de Thirlwall of Ecuador for the period (1987-2008). Following (1979), debido a su carácter primario exportador. the methodology of Sanjaya Lall (2000), the goods are classified according to the degree of technolo- Palabras clave: Economía internacional, crecgy intensity incorporated in its production. The re- imiento económico, modelos de series de tiempo. sults of the coefficients, of the generalized impulseresponse functions and variance decomposition Clasificación JEL: F14, F43, C22. indicate that goods with higher technological content have higher income elasticity so its impact on the balance of payments is greater. We conclude INTRODUCTION that Ecuador’s economic growth is constrained by its balance of payments, according to Thirlwall’s In order to determine if there is an external con law (1979), because of its primary export character. straint to growth for Ecuador, we estimate the income elasticity of exports and imports by techKeywords: International economics, economic nology intensity. We use a vector error correcgrowth, time-series models. tion model (VECM), which allows us to estimate the elasticity and identify short-term relationships JEL Classification: F14, F43, C22. between variables, it also provides two analytical tools: the impulse-response functions and variance decomposition. These tools allow us to perform a dynamic analysis of the behavior of the series.

RESUMEN

The theoretical basis of this paper is the Thirlwall’s balance of payments constraint growth model (BOPC), which in its original version proposed that the growth of a country is closely linked to the performance of its exports and imports. However, for the purposes of this paper we consider the extension of Thirlwall’s law given by Araujo and Lima (2007), which they called multi-sectorial Thirlwall’s law (MTL);

Mediante un modelo de vector de corrección del error (VEC), calculamos las elasticidades ingreso de las exportaciones e importaciones del Ecuador para el periodo (1987-2008). 1 PhD student in economics at UAM. I thank Dr. Carlos Gómez Chiñas for the valuable observations and comments made on this article. [diego_linthon22@hotmail.com]

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Vol1 1 2 emiliolinthondelgadomultisectorial by Marcos Hernández - Issuu