Balance of payments constrained growth : the importance of Thirlwall's law for the U.S. economy during the post World War II era

Thirlwall's Law and the export led growth hypothesis offer important alternative views to the traditional long term supply side growth concepts. Nevertheless, these concepts have not yet been comprehensively tested with respect to the U.S. economy. The purpose of this thesis is to provide these analyses in order to determine the magnitute to which Thirlwall's Law and the concept of export led growth may be applicable to the U.S. economy. Chapter three analyzes Thirlwall's Law, based on the U.S. import demand function; chapter four focuses on the Law, based on the U.S. export demand function. Chapter five focuses on the empirical validity of the export led growth hypothesis. Throughout the empirical parts of the study, presented in chapters three to five, Thirlwall's Law and the export led growth hypothesis, both generally considered by its advocates as long term propositions, are analyzed with cointegration. Contrary to previous studies, the analyses also systematically accounts for potential impacts of the terms of trade and/or capital flows. The findings of this study indicate that Thirlwall's Law and the export led growth concept may not provide a comprehensive explanation for the long term rate of growth of income of the United States during the post WW II era.