Crecimiento, competitividad y restricción externa en América Latina

The paper is aimed at empirically assessing both the Marshall-Lerner condition and Thirlwall's hypothesis of external constraint on economic growth for the case of Latin American. Our goal is twofold: on the one hand, the role of the exchange rate in the trade balance equilibrium is dealt with and, on the other hand, we look at the effect of the current account balance on economic dynamics. A dynamic panel (Pooled Mean Group) is applied for hypothesis testing on a sample of data of countries such as Argentina, Brazil, Chile, Colombia and Mexico for the period 1994-2015. Our main results suggest that: 1) an improvement in the real exchange rate in the long run tend to improve the trade balance, and 2) the long-term growth path of an economy is demand-determined, with the export sector as the dynamic drive.