This paper deve\u00adlops a struc\u00adtu\u00adra\u00adlist account of how the dis\u00adtri\u00adbu\u00adti\u00adon of inco\u00adme sha\u00adpes the com\u00adpo\u00adsi\u00adti\u00adon of con\u00adsu\u00admer imports in a deve\u00adlo\u00adping eco\u00adnomy, and through it the inco\u00adme elas\u00adti\u00adcity of import demand that bears on the exter\u00adnal cons\u00adtraint on growth in the Kal\u00addor-Thirlwall tra\u00addi\u00adti\u00adon. When inco\u00adme con\u00adcen\u00adtra\u00adtes in the upper part of the dis\u00adtri\u00adbu\u00adti\u00adon, con\u00adsump\u00adti\u00adon rota\u00adtes toward luxu\u00adri\u00ades \u2014 goods dis\u00adpro\u00adpor- tio\u00adna\u00adtely impor\u00adted \u2014 rai\u00adsing the inco\u00adme elas\u00adti\u00adcity of the con\u00adsu\u00admer-import bas\u00adket. We pro\u00advi\u00adde a micro-foun\u00adda\u00adti\u00adon for this depen\u00adden\u00adce, buil\u00adding on the con\u00adsump\u00adti\u00adon deci\u00adsi\u00adons of regi\u00ado\u00adnal class struc\u00adtu\u00adres and the long-stan\u00adding struc\u00adtu\u00adra\u00adlist hypothe\u00adsis of the demons\u00adtra\u00adti\u00adon effect. We test the fra\u00admework using the Chi\u00adna-dri\u00adven com\u00admo\u00addity boom in Bra\u00adzil, who\u00adse regi\u00ado\u00adnal inci\u00adden\u00adce was set by pre\u00adde\u00adter\u00admi\u00adned export struc\u00adtu\u00adres and con\u00adcen\u00adtra\u00adted inco\u00adme gains in the upper part of the dis\u00adtri\u00adbu\u00adti\u00adon. More expo\u00adsed regi\u00adons rai\u00adsed their sha\u00adre of nati\u00ado\u00adnal con\u00adsu\u00admer imports and, on that lar\u00adger base, rota\u00adted their bas\u00adkets toward impor\u00adted luxu\u00adri\u00ades, with the bas\u00adket-impli\u00aded elas\u00adti\u00adcity rising whe\u00adre ine\u00adqua\u00adlity rose most. The res\u00adpon\u00adse held under both a domes\u00adtic luxury clas\u00adsi\u00adfi\u00adca\u00adti\u00adon and one ancho\u00adred to advan\u00adced-eco\u00adnomy con\u00adsump\u00adti\u00adon, the lat\u00adter pro\u00advi\u00adding sug\u00adges\u00adti\u00adve evi\u00adden\u00adce that the demons\u00adtra\u00adti\u00adon effect ope\u00adra\u00adtes in a lar\u00adge deve\u00adlo\u00adping eco\u00adnomy. The two mar\u00adgins com\u00adpound: the regi\u00adons that came to weigh more in the nati\u00ado\u00adnal bas\u00adket also car\u00adri\u00aded the higher elas\u00adti\u00adcity, rai\u00adsing the nati\u00ado\u00adnal con\u00adsu\u00admer-import elas\u00adti\u00adcity over the boom and lea\u00adving it abo\u00adve its pre-boom level. The result is a dis\u00adtri\u00adbu\u00adti\u00adon-dri\u00adven rise in the inco\u00adme elas\u00adti\u00adcity of con\u00adsu\u00admer imports, poten\u00adti\u00adally redu\u00adcing the long-run growth rate allowed by the balan\u00adce-of-pay\u00adments constraint.<\/p>\n","protected":false},"excerpt":{"rendered":"
This paper deve\u00adlops a struc\u00adtu\u00adra\u00adlist account of how the dis\u00adtri\u00adbu\u00adti\u00adon of inco\u00adme sha\u00adpes the com\u00adpo\u00adsi\u00adti\u00adon of con\u00adsu\u00admer imports in a deve\u00adlo\u00adping eco\u00adnomy, and through it the inco\u00adme elas\u00adti\u00adcity of import demand that bears on the exter\u00adnal cons\u00adtraint on growth in the Kal\u00ad\u00addor-Thirlwall tra\u00addi\u00adti\u00adon. When inco\u00adme con\u00adcen\u00adtra\u00adtes in the upper part of the dis\u00adtri\u00adbu\u00adti\u00adon, con\u00adsump\u00adti\u00adon rotates [\u2026]<\/p>\n","protected":false},"template":"","tags":[],"made_publication_type":[78],"class_list":["post-3431","made_publication","type-made_publication","status-publish","hentry","made_publication_type-working-papers"],"acf":[],"yoast_head":"\n