Economic Growth and the Balance of Payments Constraint

This is the first book of its kind to argue in a consistent and comprehensive way the idea that a country's growth performance cannot be properly understood without reference to the performance of its tradeable goods sector and the strength of its balance of payments. It puts forward a demand-orientated theory of why growth rates differ between countries where the major constraint on demand is the balance of payments. The book is critical of neoclassical growth analysis and provides an alternative theory of growth performance to the supply-orientated approach of neoclassical theory. There are theoretical chapters comparing and contrasting neoclassical growth analysis with the new demand-orientated approach, and empirical sections which apply the new model to regions and countries, including two case-studies of the United Kingdom and Australia.