Macroeconomic ingredients for a growth model analysis for peripheral economies. A post-Keynesian-structuralist approach

By Engelbert Stockhammer

PKES Working Paper 2226

November 2022

The growth models approach (GMA) has become increasingly prominent in Comparative Political Economy over the last years. While it has originally been developed for advanced economies, there is a growing number of applications to developing countries. This raises the question how readily transferable the GMA concepts are to the peripheral capitalist experience. This paper explores the analytical building blocks for an extension of the growth models approach to developing economies from post-Keynesian-structuralist perspective. It argues, that in a developing country context supply-side considerations will be more important and builds on structuralist theory to understand the ‘real’ constraints in the developing countries growth process. It uses Minskyan theory to understand how currency hierarchy creates financial causes for international economic stratification. As a consequence the role of the state is more crucial than in advanced economies, but at the same time states are more vulnerable. The paper concludes by reflecting on the key concepts of GMA, finance-led, export-led and state-led growth in the light of developing economies and identifying neoliberal as well developmentalist versions of these.

Keywords: Comparative Political Economy, growth models, structuralism post-Keynesian Economics, developing economies

JEL classification: E60 F00 F30 O11 P10