The Role of Exports and Foreign Capital in Latin American Economic Growth

New statistical evidence from Latin America and based on an adaptation of the Cherney-Strout two-gap model is used to define how economic growth and investment levels relate to exports and the flow of foreign capital. The modified model breaks down foreign capital considerations to include supplies, long-term relationships, and the effect of export growth on economic growth. The need for further studies is noted, although policy implications are clear that either an increase in exports or an increase in inflows from foreign private investment or other foreign capital will lead to higher economic growth rates. 16 references. (DCK)