Balance-of-payments-constrained economic growth in Brazil

Vol. 23 No. 1 (2003)

Jan-Mar / 2003
Published January 1, 2003

How to Cite

Jayme Jr., Frederico Gonzaga. 2003. “Balance-of-Payments-Constrained Economic Growth in Brazil”. Brazilian Journal of Political Economy 23 (1):63-86.

Balance-of-payments-constrained economic growth in Brazil

Frederico Gonzaga Jayme Jr.
Departamento de Economia do Centro de Desenvolvimento e Planejamento Regional da Universidade Federal de Minas Gerais – CEDEPLAR-UFMG, Belo Horizonte/MG, Brasil
Brazilian Journal of Political Economy, Vol. 23 No. 1 (2003), Jan-Mar / 2003, Pages 63-86


This paper applies the Thirlwall’s balance-of-payments constraint model to Brazilian economic growth in the period 1955-98, using cointegration technique. According to Thirlwall (1979) and MacCombie and Thirlwall (1994) differences in long-term economic growth among countries can be explained by a demand induced theory of economic growth. The model is tested on the Brazilian economy after industrial take- off in 1955 until 1998 using the cointegration technique and a vector error correction (VEC) representation to find the dynamic responses of exports to GDP. The results show that there is a positive cointegration between growth in exports and long-term economic growth in Brazil, which support the fact external factors constraint Brazilian economic growth.

JEL Classification: E12; O10.

Keywords: Balance of payments constraint growth post Keynesian economics