We combine two strands of post Keynesian growth theory by imposing a balance-of-payments constraint on a Kaldorian cumulative causation model. The effects of external and internal shocks and the degree to which cumulative causation comes into play depends on the exchange rate and capital account...

This study applies the balance-of-payments-constrained growth (BPCG) model to India, a large developing country with a relatively low trade to gross domestic product ratio. Rather than assuming similar elasticities of substitution between goods produced in different regions, the study extends...