ON THE CONDITION FOR EXPORT-LED GROWTH

In this paper I explore the conditions under which favourable export shocks produce export-led growth in a three-sector, three-factor general equilibrium model that allows for endogenous capital accumulation. The export shock takes the form of either a resource discovery or an increase in the world market price of the export good. While surprisingly simple conditions define the outcome in many cases, there is no general presumption that an export boom will act an as engine of growth; much depends on the precise structural characteristics of the economy.