A model comparing savings and foreign exchange constraints to see which is binding for economic growth is known as a

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The model comparing savings and foreign exchange constraints to analyze which one is more critical for economic growth is known as the two-gap model. It suggests that developing countries face two gaps: a foreign exchange gap and a savings gap. The foreign exchange gap refers to the insufficient foreign exchange earnings to finance imports, while the savings gap pertains to the inadequate level of savings to finance investment. This model helps in identifying which of these constraints is the more binding for economic growth.

A Model Comparing Savings and Foreign Exchange Constraints to See