Template-type: ReDIF-Paper 1.0  
Author-Name: Carlos Garcimartín
Author-Email: carlos.garcimartin@urjc.es
Author-Workplace-Name: Universidad Rey Juan Carlos
Author-Name: Luis Rivas
Author-Email: larivas@profesor.ie.edu
Author-Workplace-Name: IE University 
Author-Name: Pilar García Martínez
Author-Email: pilargm@usal.es
Author-Workplace-Name: Universidad de Salamanca
Title: On the Role of Relative Prices and Capital Flows in Balance-of-Payments Constrained
	Growth: the Experiences of Portugal and Spain in the Euro Area
Abstract: Broadly speaking, the balance-of-payments constraint hypothesis as developed by Thirlwall
	has been empirically supported. Yet, it shows some shortcomings highlighted in the
	literature. In our opinion, two of them must be analysed. First, temporary disequilibria
	and capital flows must be incorporated into the balance-of-payments constrained growth
	models. Second, the role of relative prices must be made explicit, since it can be relevant
	even in an external constraint framework. This study is aimed at developing a model that
	incorporates both possibilities: temporary external disequilibria and a the impact of relative
	prices. This model is subsequently used to analyse the evolution of the Spanish and
	Portuguese economies in last decades, and, in particular, the different path shown by both
	countries since their accession to the Eurozone.
Abstract: Pese al respaldo empírico con el que ha contado la teoría de la restricción externa desarrollada
	a partir del modelo de Thirlwall, éste muestra algunas deficiencias destacadas en la
	literatura. En nuestra opinión, dos de ellas merecen ser analizadas. Por un lado, la necesidad
	de incorporar desequilibrios transitorios de la balanza de pagos y los consiguientes
	flujos de capital. Por otro, creemos los precios relativos pueden desempeñar un papel importante
	en el comercio exterior, sin que ello invalide la existencia de una restricción externa.
	El objetivo del presente trabajo consiste en desarrollar un modelo que incorpore
	ambas cuestiones, permitiendo, así, un mayor protagonismo a los precios relativos y a los
	desequilibrios temporales de la balanza de pagos. Este modelo se emplea posteriormente
	para analizar la evolución de las economías española y portuguesa en las últimas décadas
	y, en especial, las diferencias mostradas desde su incorporación a la Eurozona.
Keywords: Growth, Balance of payments constraint, Exchange rate.
Creation-Date: 2010 
Length: 26 pages
Number:
 1005
X-File-Ref: http://america.sim.ucm.es/repec/ucm/ref/wpaper05-10.txt
File-URL: https://eprints.ucm.es/id/eprint/10529/1/WP_05-10.pdf
File-Format: Application/pdf
File-Function: Full text
Handle: RePEc:ucm:wpaper:1005