The findings from the VECM for BBS data reveal that there is a positive and significant relationship between FD and GDPGR, supporting the Keynesian theory, while findings from the VECM for World Bank data indicate that the impact of Fiscal Deficit (FD) on GDPGR is mild but negative and...

There is no agreement regarding the growth-enhancing effects of financial liberalization, mainly because it is associated with risky international bank flows, lending booms, and crises. In this paper we make the case for liberalization despite the occurrence of crises. We show that in developing...

Mexico, a prominent liberalizer, failed to attain stellar gross domestic product (GDP) growth in the 1990s, and since 2001 its GDP and exports have stagnated. In this paper we argue that the lack of spectacular growth in Mexico cannot be blamed on either the North American Free Trade Agreement...

Thirlwall’s law posits that a country’s economic growth rate (relative to that of the rest of the world) depends on the ratio of its export’s income elasticity of demand to that of its imports. Empirical studies of this hypothesis have been almost entirely supportive, but we argue that the...

Thirlwall’s law of balance-of-payments-constrained growth predicts that an economy’s growth rate is determined by the ratio of its income elasticities of demand for exports and imports, multiplied by the world’s growth rate. Alexander and King (1999) argue that the typically supportive...