Balance-of-payments-constrained growth in Argentina (1976-2006)

This article explores the linkages between the balance of payment and income growth in countries for which exports are mainly food items while imports are mainly industrial goods. To capture the consequence of this structure of international specialization, the study proposes to modify the balance-of-payments-constrained growth "standard" rule (Thirlwall's law) by including the effects of different levels of elasticity of the domestic demand for food. An econometric model is used to test Argentina's behavior on the matter during the period 1976-2006.