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A Multi-sectorial Assessment of the Static Harrod Foreign Trade Multiplier

Trigg, Andrew and Ricardo, Araujo (2014): A Multi-sectorial Assessment of the Static Harrod Foreign Trade Multiplier.

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Abstract

With this inquiry we seek to develop a multi-sectorial version of the static Harrod foreign trade multiplier, by showing that indeed it can be derived from an extended version of the Pasinettian model of structural change to international trade. This new version highlights the connections between balance of payment and the level of employment and production. It is also shown that departing from this disaggregated version of the Harrod foreign multiplier we can arrive at the aggregated version thus proving the consistency of our analysis. By following this approach we go a step further in establishing the connections between the Structural Economic Dynamic and Balance-of-Payments Constrained Growth approaches.

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