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ECOS3007 International Macroeconomics Semester 1




What is the view of the relation between aggregate demand and output reflected in Thirlwall?s balance of payments-constrained growth thesis?;2. What significance is attributed by Thirlwall to movements in growth rates vis a vis movements in the real exchange rate as a means of eliminating balance of payments imbalances?;3. What is the economic interpretation of Thirlwall?s equation for the balance of payments-constrained growth rate?;4. What does Thirlwall?s analysis assume about price elasticities and cross elasticities of demand?;5. Assume for argument?s sake that all countries in the world are growing at less than the rate required for full-employment of their respective labour force, and that some of these countries are balance of payments-constrained and some are not. What is the significance of Thirlwall?s thesis in terms of allowing for world growth closer to that required for full-employment?;6. Supposing instead of a balanced trade account, that equilibrium in the balance of payments is defined in terms of a sustainable ratio of foreign debt to income. What factors determine the nature of the trade balance required to achieve equilibrium defined in these terms?


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