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Causes of the Slow Rate of Economic Growth in the United Kingdom

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    ABSTRACT: The aim of this paper is analyze the elasticity in balance of payments constrained models on Keynesian-structuralist tradition. Precisely, we intend to scrutinize why income demand elasticity of imports and exports are different between emerging and developed countries. We start from the benchmark Thirlwal (1979)'s model, emphasizing the role of income elasticities on growth among countries. Besides, we show the theoretical and empirical aspects of demand-led models highlighting why industrialization in periphery does not solve the external constraint on growth in several periphery countries. Finally, we present theoretical elements of post keynesian, evolutionary and intitutionalist traditions that contribute to the understanding of growth in developing countries. Conclusions highlight that elasticities are endogenous and depend on the structural heterogeneity of those economies.
    XVIII Encontro Regional de Economia - ANPEC-NORDESTE; 07/2013
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    ABSTRACT: The paper builds upon the analytical effort developed in our previous work (Ciarli, Lorentz, Savona and Valente 2010a, Ciarli, Lorentz, Savona and Valente 2012) and focuses on the specific effects of structural changes in demand on the occurrence of the Kaldor-Verdoorn Law and different growth regimes. We analyse the role of heterogeneity in consumption preferences resulting from income class mobility; the hysteresis of adjustment in consumption levels with respect to changes in income levels and firms' production plans as a response to changes in consumption. We show that the het-erogeneity in consumption behaviour is responsible for the type of growth regime emerging from the endogenous structural changes, namely extensive versus intensive growth regimes. The switch between one regime to the other can be directly triggered by the market structure resulting from demand-driven structural changes. Further, consumption hysteresis might constrain the emergence of increasing returns and the setting of the Kaldor Verdoorn law, by allowing output either to sufficiently stabilise or impeding this stabilisation.
    15th International Conference of the International Joseph A. Schumpeter Society, Jena; 07/2014