Endogenous income elasticities

This paper deepens the analysis of the income elasticities of import and export demand in relation to the real exchange rate (RER) within a balance of payments constrained growth framework. It identifies how the RER can affect these elasticities and explores the resulting implications. A key highli...

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Main Author: Fabrizio J. Missio
Format: Article
Language:English
Published: Associazione Economia civile 2025-04-01
Series:PSL Quarterly Review
Subjects:
Online Access:https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/18918
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author Fabrizio J. Missio
author_facet Fabrizio J. Missio
author_sort Fabrizio J. Missio
collection DOAJ
description This paper deepens the analysis of the income elasticities of import and export demand in relation to the real exchange rate (RER) within a balance of payments constrained growth framework. It identifies how the RER can affect these elasticities and explores the resulting implications. A key highlight is the RER’s ability to induce structural changes toward more complex and technology-intensive sectors. To illustrate this, a formal multisectoral model is presented, demonstrating the conditions under which a higher RER can alleviate external constraints. Finally, several related considerations are addressed.
format Article
id doaj-art-5f40882ef63d4929ae27c2fd80ea649f
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issn 2037-3635
2037-3643
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publishDate 2025-04-01
publisher Associazione Economia civile
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spelling doaj-art-5f40882ef63d4929ae27c2fd80ea649f2025-08-20T02:20:12ZengAssociazione Economia civilePSL Quarterly Review2037-36352037-36432025-04-017831210.13133/2037-3643/18918Endogenous income elasticitiesFabrizio J. Missio0Federal University of Minas Gerais (CEDEPLAR/UFMG), Belo Horizonte This paper deepens the analysis of the income elasticities of import and export demand in relation to the real exchange rate (RER) within a balance of payments constrained growth framework. It identifies how the RER can affect these elasticities and explores the resulting implications. A key highlight is the RER’s ability to induce structural changes toward more complex and technology-intensive sectors. To illustrate this, a formal multisectoral model is presented, demonstrating the conditions under which a higher RER can alleviate external constraints. Finally, several related considerations are addressed. https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/18918balance-of-payments constraintmulti-sectoral Thirlwall’s Lawincome elasticities
spellingShingle Fabrizio J. Missio
Endogenous income elasticities
PSL Quarterly Review
balance-of-payments constraint
multi-sectoral Thirlwall’s Law
income elasticities
title Endogenous income elasticities
title_full Endogenous income elasticities
title_fullStr Endogenous income elasticities
title_full_unstemmed Endogenous income elasticities
title_short Endogenous income elasticities
title_sort endogenous income elasticities
topic balance-of-payments constraint
multi-sectoral Thirlwall’s Law
income elasticities
url https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/18918
work_keys_str_mv AT fabriziojmissio endogenousincomeelasticities