Developing Countries’ Deadlock: What Does the Thirlwall's Law Offer Us?

Abstract

This study aims to discuss potential alternatives for economic development in developing countries, with contributions from the theoretical background of Thirlwall's law. Developing countries' foreign trade constraints will be highlighted, followed by a comparison of Türkiye's past growth performance with results obtained from Thirlwall’s Law equations using balance of payments data. Türkiye's actual growth rates closely resemble the growth forecast of Thirlwall’s model, which indicates that post-Keynesian approaches are worth considering to alter the current situation. While providing a perfect solution that could reverse everything for developing countries may be a distant goal, this study aspires to foster a mindset capable of changing the course of events.