Abstract:This paper analyzes the evolution of income elasticities of imports and verifies the validity original Thirlwall’s Law for eight Latin American countries overs the period 1961-2018. Given the econometric issues inherent to classical time-varying parameter regressions, a Bayesian estimation procedure is implemented in order to provide more robust parameter estimates. A stochastic volatility specification is also included to take into account the potential presence of conditional heteroskedasticity. While some L… Show more
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