Abstract

This study considers the main economic growth models from the perspective of their relation to the external sector. It defines the advantages and drawbacks of the export-led model and of the import-substitution model and sheds light on the growth constraints ensuing from the balance of payments and the elasticities of imports and exports. It analyses the prerequisites for selection of one or another growth model and comes to the conclusion that Bulgaria will have to implement an export-oriented growth model within a medium-term perspective. In this relation, it makes proposals aimed at improving the country’s foreign trade policy.