HETERODOX MODELS OF GROWTH IN OPEN ECONOMIES: AN EXTENSION OF KALDOR-THIRLWALL MODELS

ABSTRACT

The article aims as a central tenet to contribute to the process of building heterodox growth models for open economies in line with Kaldor (1970) and Thirlwall (1979). Therefore it: i) retrieved the elements common to these models that provided a general theoretical basis for the model building process, ii) sought to improve coordination between the growth rates of aggregate demand and that allowed by the external constraint, as long as filled the resulting gaps in terms of modeling the growth of aggregate demand, iii) reviewed the literature intended to improve the modeling of the external constraint in this theoretical line, gathering important insights to build a model of external constraints that tried to prevent some of the deficiencies which remained at that literature; iv) explored some of the properties and the most salient features of the solution built in that manner.

KEYWORDS:
heterodox growth models; external constraint; aggregated demand