BALANCE OF PAYMENT CONSTRAINT GROWTH: The Case Of Selected Asean Countries
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Date
2005-05
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Jurnal Bisnis, Manajemen & Ekonomi Vol 6 No. 4,
Universitas Widyatama
Abstract
This study provides an empirical evidence of the economic performance of the four
ASEAN countries: Indonesia, Malaysia. The Philippines and Thailand based on the
application of Thirlwall & Hussain law (1979,1982). In the model developed by
Thirlwall and Hussain (I 979,1982) the expenditure of a country cannot definitely
grow faster than income and the economic performance of a country is constrained
by its balance of payment position. So it is therefore argued that over the long run
countries will grow at a rate consistent with the equilibrium in their balance of
payment. The empirical results of this paper indicates that the economic growth of
these four countries is constrained by their balance of payment position particularly
the constraint on demand since the evidence shows that there is a close
association between the income growth predicted by the Thirlwall & Hussain's
Balance of Payment Constraint (BPC) growth model to the actual growth during the
1970-1 998 period. The empirical findings also supported the Thirllwall & Hussain 's
expectation that their extended version of the BPC model will give a closer
prediction of the actual growth than that predicted by the BPC simple model
developed by Thirlwall(l979).
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