Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324128 
Year of Publication: 
2025
Citation: 
[Journal:] PSL Quarterly Review [ISSN:] 2037-3643 [Volume:] 78 [Issue:] 312 [Year:] 2025 [Pages:] 51-66
Publisher: 
Associazione Economia civile, Rome
Abstract: 
This paper deepens the analysis of the income elasticities of import and export demand in relation to the real exchange rate (RER) within a balance of payments constrained growth framework. It identifies how the RER can affect these elasticities and explores the resulting implications. A key highlight is the RER's ability to induce structural changes toward more complex and technologyintensive sectors. To illustrate this, a formal multisectoral model is presented, demonstrating the conditions under which a higher RER can alleviate external constraints. Finally, several related considerations are addressed.
Subjects: 
balance-of-payments constraint
multi-sectoral Thirlwall's Law
income elasticities
JEL: 
O11
E12
F43
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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