Showing papers in "Revista de Economia Política in 2008"
TL;DR: The Dutch disease is a major market failure originated in the existence of cheap and abundant natural or human resources that keep overvalued the currency of a country for an undetermined period of time, thus turning non profitable the production of tradable goods using technology in the state-of-the-art.
Abstract: The Dutch disease is a major market failure originated in the existence of cheap and abundant natural or human resources that keep overvalued the currency of a country for an undetermined period of time, thus turning non profitable the production of tradable goods using technology in the state-of-the-art. It is an obstacle to growth on the demand side, because it limits investment opportunities. The severity of the Dutch disease varies according to the extent of the Ricardian rents involved, i.e., according to the difference between two exchange rate equilibriums: the ‘current’ or market rate and the ‘industrial’ rate — the one that make viable efficient tradable industries. Its main symptoms, besides overvalued currency, are low rates of growth of the manufacturing industry, artificially high real wages, and unemployment. Its neutralization requires managing the exchange rate. The principal instrument for that is a sales or export tax on the commodities that give origin to the Dutch disease. In order to neutralize it policymakers face major political obstacles since it involves taxing exports and reducing wages. Finally, this papers argues that there is an extended concept of Dutch disease: besides having its origin in natural resources, it may arise from cheap labor provided that the ‘wage spread’ in the developing country is considerably larger than in the developed
274 citations
TL;DR: The authors analyzes the theoretical concept of deindustrialization and evaluates if Brazil has suffered from a new Dutch disease, and concludes that despite the manufacturing sector declining participation in the Brazilian Gross Domestic Product (GDP), the empirical evidence show that the changes in the economy structure since the mid-1980s to the end of 2005 should not be described as deindustrialisation, since there was not evidence of either generalized reallocation of resources towards industries based on natural resources, or a pattern of export specialization in goods based on technologies or even on labor.
Abstract: Are There evidences of deindustrialization in Brazil? This paper aims at analyzing the theoretical concept of deindustrialization, and evaluating if Brazil, following the implementation of economic reforms in the 1990´s, has suffered from a “new Dutch disease”. Despite the manufacturing sector declining participation in the Brazilian Gross Domestic Product (GDP), the empirical evidence show that the changes in the economy structure since the mid-1980’s to the end of 2005 should not be described as deindustrialization. Since there was not evidence of either generalized reallocation of resources towards industries based on natural resources, or a pattern of export specialization in goods technologically based on natural resources or even on labor, one cannot conclude that Brazil was infected by a “new Dutch disease”.
153 citations
49 citations
TL;DR: The dominant current interpretation points to the progresses made in terms of monetary stability, balance of payments and structural reforms, but these achievements should be taken as generally conditioning, rather than actually shaping the new picture as discussed by the authors.
Abstract: According to recent available information, the Brazilian economy may be entering a cycle of sustained growth. The dominant current interpretation points to the progresses made in terms of monetary stability, Balance of Payments and structural reforms. Indeed, without monetary stability and the commercial opening of the economy, investments would not be increasing and credit growth would not be helping the emergence of millions of new consumers. But these achievements should be taken as generally conditioning, rather than actually shaping the new picture. Some unexpected (not rarely positive) consequences of overcoming the long enduring semi-stagnation, the emergence of China as a major player, and its consequences on the necessary re-structuring of the Brazilian industry, seem to be decisive in the present day redefinition of the Brazilian GDP growth potential.
31 citations
TL;DR: In this article, a methodological definition based on an institutionalist approach and favoring the interaction between the political and the economic variables is proposed to explain the 2nd PND (national development plan).
Abstract: The State and its reasons: the 2 nd PND. This paper intends to contribute to the debate on the reasons why the Geisel administration (1974-78) chose — as it faced an adverse conjuncture — an accelerated growth agenda which was materialized in the 2 nd PND (National Development Plan). In order to do so, it resorts to a methodological definition which is based upon an institutionalist approach and favors the interaction between the political and the economic variables. Contradicting the literature that interprets the strong presence of the State and the regional decentralization of the 2 nd PND as signs of neopatrimonialism, it is advocated that this category of analysis is inadequate to explain the government’s choice, although this aspect is embedded in the Brazilian social-historical formation. The political rationality of the plan must be investigated in the conjuncture itself, marked by the liberalization project, which does not clash with the plan’s economic rationality — on the contrary, it is complemented by it.
27 citations
TL;DR: In this paper, the authors deal with the financial crisis triggered after the default of subprime mortgages in the United States which expanded to a global systemic crisis and discuss the measures implemented by central banks in order to manage this financial crisis.
Abstract: This paper deals with the financial crisis triggered after the default of subprime mortgages in the United States which expanded to a global systemic crisis. It is divided into a brief introduction and three sections. The first section sums up the dynamics of inflation and deflation of real estate and financial assets which characterizes finance-led cycles. The second section covers major effect of financial assets deflation on the American and European banks. The third section focuses on measures implemented by central banks in order to manage this financial crisis.
JEL Classification: E31; E32; G12; G21; G24.
21 citations
TL;DR: In this paper, the authors argue that monetary inconvertibility is a crucial problem of peripheral countries and that an inherent flaw in the store of value of emerging market currencies, derived from original sin is the main reason for de facto inconvertible and underdevelopment of domestic financial system of these countries.
Abstract: The central hypothesis of this article is that in the context of globalization, monetary inconvertibility is a crucial problem of peripheral countries. It begins with a brief review of the debate from a historical point of view and then stresses the contemporary opposite's views on the fragility of financial system of emerging countries: the original sin and the debt intolerance hypothesis. Despite of supporting the first one, the article goes further and explores the domestic implication of inconvertibility. It criticizes the jurisdicional uncertainty proposition showing that an inherent flaw in the store of value of emerging market currencies, derived from original sin is the main reason for de facto inconvertibility and underdevelopment of domestic financial system of these countries.
21 citations
TL;DR: In this paper, the authors verify the hypothesis of the effect of the status of employment of the head of the family on the occurrence of child labor, as well as analyze other characteristics which can influence such behavior.
Abstract: The objective of this paper is to verify the hypothesis of the effect of the status of employment of the head of the family on the occurrence of child labor, as well as to analyze other characteristics which can influence such behavior. A probit model was used to realize the statistical tests. The results ratify the hypothesis proposed that the families whose head works as an independent worker show higher probability for the occurrence of child labor than those whose head works as a formal salaried worker. Among other results, it must be highlighted, making simulations, that increasing parents’ schooling is more efficient than augmenting income to reduce the use of child labor. These results endorse the proposition that the status of employment should be used, complementing the criteria of income per capita, to families in the cash transfers programmes or others to eradicate child labor.
JEL Classification: J13; J22; J44.
20 citations
TL;DR: In this paper, a review of some expected, but other quite surprising results regarding country estimates for the year 2000 of genuine saving, a sustainability indicator developed by a World Bank research team, is presented.
Abstract: The paper builds up from a review of some expected, but other quite surprising results regarding country estimates for the year 2000 of genuine saving, a sustainability indicator developed by a World Bank research team. We examine this indicator, founded on neoclassical welfare theory, and discuss one of its major problems. Theoretical developments from ecological economics are then considered, together with insights from Georgescu-Roegen's approach to the production process, in search for an alternative approach. A model with potentially fruitful contributions in this direction is reviewed; it points the course efforts could take enable sustainability evaluations based on a more realistic set of interrelated monetary and biophysical indicators.
17 citations
17 citations
TL;DR: The authors examined the Brazilian experience from the "economic miracle" to the "lost decade" and found that the evolution of the Brazilian process of capital accumulation has been extremely dependent on the masses of extraordinary wealth.
Abstract: The present paper examines the Brazilian experience from the ‘Economic Miracle’ to the ‘Lost Decade’. Its aim is to advance an alternative measurement of the flows of extraordinary wealth (i.e. ground-rent and net external credit) available for appropriation in the Brazilian economy and to asses their relevance in sustaining the process of accumulation of industrial capital. That is done in order to provide further and more accurate evidence to the claim that the evolution of the Brazilian process of capital accumulation has been extremely dependent on the evolution of those masses of extraordinary wealth.
TL;DR: In this paper, the authors compare two groups of countries, Asia and Latin American countries, and conduct an econometric test comparing these two groups and three variables: the rate of investment, the current account deficit or surplus that would indicate or not a competitive exchange rate, and public deficit.
Abstract: Globalization and nation-states are not in contradiction, since globalization is the present stage of capitalist development, and the nation-state is the territorial political unit that organizes the space and population in the capitalist system. Since the 1980s, Global Capitalism constitutes the economic system characterized by the opening of all national markets and a fierce competition between nation-states. Developing countries tend to catch up, while rich countries try to neutralize such competitive effort, using globalism as an ideology, and conventional orthodoxy as a strategy. Middle-income countries that are catching up in the realm of globalization are the ones that count with a national development strategy. This is broadly the case of the dynamic Asian countries. In contrast, Latin American countries have no longer their own strategy, and grow less. To add data to the argument, the author conducts an econometric test comparing these two groups of countries, and three variables: the rate of investment, the current account deficit or surplus that would indicate or not a competitive exchange rate, and public deficit.
TL;DR: In this article, the authors analyze the most important experiences with school accountability policy (SA) in Brazil and suggest that their impacts on the quality of education are not significant due to the fact that: (i) either it does not incorporate a system in which the school is responsible for the students' performance; (ii) or the incentive schemes are not appropriately designed.
Abstract: This paper analyses the most important experiences with school accountability policy (SA) in Brazil. The analysis suggests that their impacts on the quality of education are not significant due to the fact that: (i) either it does not incorporate a system in which the school is responsible for the students performance; (ii) or the incentive schemes are not appropriately designed. Finally, it discusses the main barriers to the adoption of an efficient SA at the national level in Brazil.
TL;DR: In this paper, the authors discuss the prospects for the integration of South America, stressing that there are two competing projects: the FTAA and the Mercosur, and the role of smaller countries.
Abstract: This paper discusses the prospects for the integration of South America, stressing that there are two competing projects. One the one hand, we have the Free Trade Area of the Americas (FTAA), as proposed by Washington, or bilateral free trade agreements with the United States in the FTAA format. On the other hand, we have Mercosur, recently expanded by the accession of Venezuela. Washington’s still very significant but declining influence in South America, relations between Argentina and Brazil, Venezuela’s entry into Mercosur, and the role of smaller countries are successively examined.
JEL Classification: F15; P16.
TL;DR: In this article, the authors argue that the paralysis of the state generated by the crises of the 1970s and 1980s deprived the economies of the region of an important lever to resume and sustain growth.
Abstract: The authors of this paper assert that the paralysis of the state generated by the crises of the 1970s and 1980s deprived the economies of the region of an important lever to resume and sustain growth. They thus maintain that to overcome stagnation it will be necessary to reconstruct the state's capacity to implement pro-growth policies. Following Keynes and Kalecki's ideas, but also classical development economists, the authors argue, first, that short-term macroeconomic policies, to reduce unemployment and to increase the degree of capacity utilization, should be used to promote the generation of profits to firms and to wake up entrepreneurs' animal spirits. Short-term expansionary policies should be coupled with measures to improve competitiveness and avoid balance of payments problems. They also claim that alternatives to the liberal programme will fail unless a pro-growth strategy is adopted which includes both short- and long-term policies. They thus propose that long-term policies must complete the package, signaling: a) sustained increases of effective demand in the future; and b) investment priorities to ensure that capacities will be created in strategic sectors and branches of the economy.
TL;DR: The authors analyzed the recent behavior of the Brazilian direct investment abroad, as captured by an annual census conducted by the Central Bank of Brazil since 2001, by putting it in a broader perspective that includes international official data sources and early sample studies.
Abstract: The recent behavior of the Brazilian direct investment abroad in perspective. This paper analyzes the recent behavior of the Brazilian direct investment abroad, as captured by an annual census conducted by the Central Bank of Brazil since 2001, by putting it in a broader perspective that includes international official data sources and early sample studies. Though the Central Bank has not been making available more disaggregated data than those analyzed here, it is intended to contribute to a better grasping of the perspectives of competitive internationalization of local firms, which is desirable not only as far as the external accounts are concerned, but also from the viewpoint of the technological capabilities of the local firms.
TL;DR: In this article, the authors found that the service sector received the highest proportion of foreign investment and this market seeking strategy was responsible for the growth of the Brazilian imports, and that those enterprises with majority of foreign capital have increased their imports the most from 1995 to 2000.
Abstract: Brazil, in the 1990s, assumed a remarkable position as a host of foreign direct investment. It is worth mentioning that the service sector received the highest proportion of foreign investment. This market seeking strategy was responsible for the growth of the Brazilian imports. The results are confirmed by the performance of foreign enterprises into different groups of activities. Those enterprises with majority of foreign capital have increased their imports the most from 1995 to 2000. Therefore, during the 1995-2000 period, this study does not support the view that foreign investment has directly improved the performance of the Brazilian exporting sector.
TL;DR: The assumption that "There Is No Alternative" (TINA) to capitalism as practiced in the United States of America and Western Europe has been the bane of aids effectiveness in assisting to solve the underdevelopment problem in Africa as discussed by the authors.
Abstract: The assumption that 'There Is No Alternative' (TINA) to capitalism as practiced in the United States of America and Western Europe has been the bane of aids effectiveness in assisting to solve the underdevelopment problem in Africa. This paper attempts to show that except there is a fundamental reorientation in the conceptualization of capitalism-free market and democracy-the underdevelopment problem would only be further complicated with aids.
TL;DR: In this article, the authors show that the finance-investment-savings-funding circuit (F-I-S-F) also prevails for open economies and that budget deficits do not cause savings restriction for investment.
Abstract: The finance-investment-savings-funding circuit in open economies. On monetary economies the Finance-Investment-Savings-Funding circuit (F-I-S-F) prevails. Investment precedes savings. This circuit was worked out for a closed economy. This study seeks to demonstrate that the circuit F-I-S-F also prevails for open economies. A second point studied in this paper relates the relationship between budget deficits and savings restriction for investment. Conclusions highlight that the circuit F-I-S-F prevails for open economies and that budget deficits do not cause savings restriction for investment. In some situations budget deficits transfer the effects of investment for national savings formation from domestic economy to the rest of the world.
TL;DR: In this paper, the authors present a formal model of the monetary policy identified generally as "inflation targeting policy", an instrument of intervention of the central bank, through the short run nominal interest rate.
Abstract: Inflation targeting: the conventional analysis and an alternative model. This article has two aims: the first one is to present a formal model of the monetary policy identified generally as "inflation targeting policy", an instrument of intervention of the central bank, through the short run nominal interest rate. The second aim is to discuss and criticize the theoretical assumptions of the model specially the concepts of "natural rate of interest" and of potential product presented by the "augmented Philips curve"; and to present a more realistic control of inflation targeting which does not assume the hypotheses above, and in which inflation targeting is based on the control of real rate of interest.
TL;DR: In this paper, the authors carried out an empirical analysis about the relation between capital account liberalization and economic growth having as object of study the experience of 16 countries of Latin America with annual data for the period 1986-2000.
Abstract: The aim of this paper is to carry out an empirical analysis about the relation between Capital Account Liberalization and Economic Growth having as object of study the experience of 16 countries of Latin America with annual data for the period 1986-2000. The econometrical calculations do not corroborate the hypothesis that the liberalization of Capital Account would stimulate the economic growth. The results suggest an adverse effect of the liberalization of the Capital Account on the real growth gross domestic product per capita of the countries.
TL;DR: In this article, a synthetic regional financial inequality index is proposed and calculated in a semester basis over the 2-1994/02-2000 period, and the inequality measure attempts to capture to what extent deposits in a given state translate into credit operations in that locality.
Abstract: The paper investigates a neglected aspect of regional inequality in Brazil, namely regional inequalities related to financial flows. A synthetic regional financial inequality index is proposed and calculated in a semester basis over the 02-1994/02-2000 period. The inequality measure attempts to capture to what extent deposits in a given state translate into credit operations in that locality. Two main results emerge. First, non-negligible inequality patterns emerge when one considers the segment of private banks and those are consistent with an important proportion of states with a predominantly exporting pattern, for which deposits surpasses loans in that locality. Second, if one focus on the segment of public banks, an opposite pattern appears, that is consistent with decision patterns that might have, in part, a regional development motivation.
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TL;DR: In this paper, the causes of the failure of Banco Nacional and the resolution method adopted by the Brazilian central bank are analyzed, and the private and social costs of this bank failure are analyzed.
Abstract: Banco Nacional: Ponzi game, PROER and FCVS. This paper analyses the causes of the failure of Banco Nacional and the resolution method adopted by the Brazilian central bank. The program (PROER) designed by the central bank and its legal framework allowed the failed bank to buy " defaulted securities" , financed by the central bank, and to use them as borrowing collateral. The paper also analyses the private and social costs of this bank failure.
TL;DR: In this paper, the authors analyze the political constraints of pension reform in Argentina and present a brief description of the development of pension programs in Latin America and discuss the pension system crisis and the main proposals in order to overcome this crisis.
Abstract: New pension programs in Latin America: lessons from the Argentinean experience. This work analyzes the political constraints of pension reform in Argentina. The first part presents a brief description of the development of pension programs in Latin America. Additionally, it also discusses the pension system crisis and the main proposals in order to overcome this crisis. The second part examines the peculiarities of the Argentine pension reform, with specific attention on economic imperatives and political constraints which have shaped
TL;DR: After the sequence of structural adjustments decisions suggested by the IMF, Brazilian economy became wider opened, as the consequences from financial globalization were stronger than those from commercial globalization as discussed by the authors. Nevertheless, social and economical reality didn't show much improvement.
Abstract: After the sequence of structural adjustments decisions suggested by the IMF, Brazilian economy became wider opened, as the consequences from financial globalization were stronger than those from commercial globalization. Nevertheless, social and economical reality didn't show much improvement. On the contrary, figures on economic increase and inequalities show Brazil behind the average of developing countries. Even if the effects caused by "mondialisation" on weakened economies are well known, globalization can not be taken as the only guilty of weak economic increase, for maintaining the high level of inequalities or for the increase of precariousness. Responsibility must be searched on high inequalities in where operates "mondialisation", on weakness of public policies, on irresponsible way of opening of the economy and in fiscal policy in favor of financial sector. Other countries have reached quite different results, once the have adopted different public policies, which goal was to establish control and reduction upon the negatives effects of globalization.