Date of Award
Thirlwall's Law and the 45-degree rule, originally formulated by Krugman, are radically different interpretations of the same statistical regularity. This statistical regularity is that a country's long-run growth rate will approximate to the ratio of that country's export growth to its import elasticity of demand. Thirlwall's Law falls under a Post-Keynesian framework which is primarily a demand-side model. The 45-degree rule relies on a supply-side interpretation, a result of its neoclassical origins. This thesis seeks to answer two questions. The first is, are the members of the Post-Keynesian and neoclassical communities working on each of these theories aware of the work being done by the other community? The second is if they are aware of each other, why have they not collaborated on research given that their interpretations are derived from exactly the same mathematical models?
Garbacik, Karl, "Thirlwall's Law and Krugman's 45-degree Rule: Mathematically Identical, Mutually Exclusive" (2010). Economics Undergraduate Honors Theses. 1.