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John McCombie’s Contribution to the Applied Economics of Growth in a Closed and Open Economy

  • A. P. Thirlwall
Chapter

Abstract

Tony Thirlwall, in this chapter, entitled ‘John McCombie’s Contribution to the Applied Economics of Growth in a Closed and Open Economy’, focuses on John McCombie’s major contributions to our understanding of growth rate differences between countries. This chapter is divided into three parts. The first part deals with Kaldor’s growth laws and particularly John’s work on Verdoorn’s Law—its estimation, and resolving the static/dynamic paradox that increasing returns are found when the growth of labour productivity is regressed on the growth of manufacturing output but not when the log level of productivity is regressed on the level of manufacturing output. The second part outlines John’s contribution to the theory of balance of payments-constrained growth, particularly showing that the dynamic Harrod trade multiplier result can be interpreted as the Hicks super multiplier. The third part shows that Kaldor’s first law of growth, that manufacturing is the engine of growth, is also a reduced form of an export-led growth model, because the export growth of countries is closely related to the growth of manufactured exports.

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • A. P. Thirlwall
    • 1
  1. 1.School of Economics, Keynes CollegeUniversity of KentCanterburyUK

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