The interaction between the effective (yE) and the natural rates of growth (yN) is a central part — implicitly or explicitly addressed — in all growth models. A stable equilibrium requires these two rates to converge; otherwise, one or more key macroeconomic variables would be rising or...

This paper develops a growth model (based on the Keynesian literature of Balance-of-Payments-constrained growth and on the Minskyan concept of financial fragility) aimed at describing some stylized facts of the current economic situation in Latin America. In particular, it discusses why the...