An Analysis of So-Called Export-led Growth

Abstract

The stylized fact that strong economic is usually accompanied with strong export leads many people to conclude that the export sector is the main driving force behind those episodes. The model in this paper, however, shows that the non-tradable sector may also generate high economic together with high export growth. Evidence shows that out of 71 so-called export-led episodes, only 37 of them are consistent with the exports driving hypothesis. Most of the remaining episodes (24 cases) experienced significant real exchange rate depreciation and are more likely to be characterized by growth driving exports.