Thirlwall's law: nation A's maximum growth without an international payments constraint depends on the ratio of A's import income elasticity vis-a-vis the world's income elasticity for A's exports, and the world's growth rate. If LDCs produce low income elasticity raw materials while the developed world specializes in high income elasticity manufactured goods, then LDCs will grow at a slower rate than the developed world. Given current population and economic growth rates of LDCs and the developed world, this implies that LDCs living standards will fall unless developed nation's increase their economic growth significantly.

LDC: Less Developed Countries

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