There is a common belief, assiduously nurtured by several international organisations, that a strategy of export-led growth brings about a higher growth rate for an economy than otherwise; and that this is true for every economy adopting such a strategy. This, however, is a misconception. All economies cannot experience an acceleration in their growth rate by moving to an export-led growth strategy. And if some economies do, they must be doing so at the expense of other economies that witness a decline in their growth rate compared to before. This is because a shift to a strategy of export-led growth does not, per se, raise the rate of growth of aggregate demand in the world economy, to which the rate of growth of world output must be tied, whatever the growth strategy that countries adopt.
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