The false promises of the (second) Washington consensus: evidence from Latin America and the Caribbean (1990-2003)

The objective of this paper is twofold. Firstly, we show how, and to what extent, Latin American and Caribbean countries applied the precepts of the second Washington consensus, i.e. a consensus which stresses the capital account liberalization. Secondly, we highlight the effects of this set of reforms on their economies. Thus, we show that countries having most scrupulously followed these recommendations did not experience better economic results. On the contrary, their situation as regards inequality and debt is getting worse than others.

O circuito finance-investimento-poupança- funding em economias abertas

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 déficits transfer the effects of investment for national savings formation from domestic economy to the rest of the world.

A globalização no Brasil: responsável ou bode expiatório?

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.

Resuming growth in Latin America: short and long term policies

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.

Michal Kalecki, um pioneiro da teoria econômica do desenvolvimento

Kalecki made important contributions to development economics, which rank him among the founding fathers of this area of our discipline. The objective of this paper is to give an account of his contributions, and in particular of his conception of the peculiarities and the way of functioning of the underdeveloped economies, and of the barriers that limits their capacity for high and sustained long run growth. As most socialist economists of his time, he was skeptic about the possibilities of overcoming underdevelopment under capitalism. However, in contradistinction to other pioneers of development economics, Kalecki did not stress the international forces that hamper development, but put the accent rather in the internal institutions and social and political determinants. In particular, the feudal and semi-feudal conditions in agriculture, the reduced market ensuing from income concentration and widespread monopolization of the economy, and the lack of willingness of entrepreneurs to carry out the necessary investments. Accordingly, his economic policy recommendations emphasized also the domestic aspects involved.

States and Economic Development

Today the Washington Consensus on development lies in tatters. The recent history of the developing world has been unkind to the core claim that a nation that opens its economy and keeps government's role to a minimum invariably experiences rapid economic growth. The evidence against this claim is strong: the developing world as a whole grew faster during the era of state intervention and import substitution (1950-1980) than in the more recent era of structural adjustment (1990-2005); and the recent economic performance of both Latin America and Sub-Saharan Africaregions that truly embraced neoliberalismhas lagged well behind that of many Asian economies, which have instead pursued judicial and unorthodox combinations of state intervention and economic openness. As scholars and policy makers reconstruct alternatives to the Washington Consensus on development, it is important to underline that prudent and effective state intervention and selective integration with the global economy have been responsible for development success in the past; they are also likely to remain the recipes for upward mobility in the global economy in the future."

Metas de inflação, política monetária e investimento: um estudo para dezessete países

In this paper two hypotheses about the relationship between monetary policy and investment in the context of the inflation target system were tested. One of these hypotheses is based on the idea of neutrality of money, and the other hypothesis is based on the reject of that idea. An investment equation for seventeen economies using a piece-wise dummy variable was estimated by the Methodology of Panel Data. The results highlight that a negative correlation between current expectation of restrictive monetary policy and current investment rose after the inflation target system implementation.

Os efeitos das políticas industriais para o setor de produtos eletrônicos do Brasil

The effect of industrial policies on the electronic sector in Brazil. Brazil's reputation in vertical industrial policies is dreadful. The electronics industry case is a good example. As measured by the performance of Brazil's exports vis-à-vis that of a group of emerging economies, the result of these policies was a total disaster. Had not been for the inadequacy of Brazil's industrial policies for this sector, exports of manufactures could have been between 36% and 46% higher than they actually were. Brazil's cumulated losses from 1984, when foreign microcomputer firms were prohibited to operate in the country, are estimated to be from 3.6 to 4.6 the country's manufactures export revenue in 2005.

Fatores comuns determinantes de crises cambiais e financeiras

Determinative common factors of currency and financial crisis. This paper identifies and evaluates determinative common factors of currency and financial crisis in relation to 86 crises episodes between 1970-2004, based on factor analysis, cluster and discriminant analysis. One evidenced that the rise of the ratios of domestic credit, fiscal deficit and residents bank deposits to the GDP is inherent to the different types of crises classified for economic literature. It was also identified as common factors to these episodes some indicators that capture the excessive monetary expansion of the economies and that reflect the fall in international reserves, represented by M2/Reserves and Imports/Reserves ratios and also the total volume of international reserves.

The new international financial crisis: causes, consequences and perspectives

The paper investigates the recent financial crisis within a historical and comparative perspective having in mind that it is ultimately a confidence crisis, initially associated to a chain of high risk loans and financial innovations that spread thorough the international system culminating with impressive wealth losses. The financial market will eventually recover from the crisis but the outcome should be followed by a different and more disciplined set of international institutions. There will be a change on how we perceive the widespread liberal argument that the market is always efficient, or at least, more efficient than any State intervention, overcoming the false perception that the State is in opposition to the market. A deep financial crisis brings out a period of wealth losses and an adjustment process characterized by price corrections (commodities and equity price deflation) and real effects (recession and lower employment), and a period of turbulences and end of illusions is in place.

Celso Furtado, o retorno à polêmica fundamental

Celso Furtado, the return to the basic controversy. A reading of the work of Celso Furtado in its completion opens an enriching view of the interaction between theoretical thinking and the unveiling of Latin-America history. Starting from an appraisal of the pre-Classic and Classic authors, Furtado outlined an approach of surplus theory. That would enable development theory to deal with the unevenly industrialized economies like Brazil. His thorough analysis of development and underdevelopment processes broke away from the initial ECLA experiences to build a planning proposal the uprising country. The French roots of his academic profile helped him to keep an orderly explanation of capital demand that kept him siding with Wicksell against the subjective theory of Schumpeter.

Subdesenvolvimento sustentável? Velhas e novas contradições na periferia do capitalismo

This paper addresses the concept of sustainable development and, more particularly, its applicability in underdeveloped economies when analyzing reciprocal effects between economic organization and environmental issues. It also addresses the relationships between development and underdevelopment, from an ecological economics' approach, and its theoretical implications regarding the concept of sustainable development. We conclude that the specificities of Latin American economies, when compared to those economies of developed countries, also entail, beyond economical disparities, the existence of strong antagonisms from an environmental standpoint, which are recurrently ignored by most of the interpretations concerning sustainable development.

Taxa de câmbio real e crescimento econômico: uma comparação entre economias emergentes e desenvolvidas

Real exchange rate and economic growth: a comparison between emerging and developed economies. This paper presents a discussion on the relationship between economic growth and real exchange rate. The article presents the results generated by a dynamic panel that tested the relationship of economic growth with the level of the exchange rate, exchange rate volatility and the choice of exchange rate regime from 26 countries, 13 emerging and 13 developed. The results suggest that the level of the exchange rate and volatility are relevant for growth. Finally, the paper stresses that there are important differences when comparing developed and emerging economies.

Fiscal policy and private investment: latin america in a comparative perspective

The main objective of the paper is to assess the impact of fiscal variables on private investment comparing some Latin-American economies to other advanced ones. For such purposes, the authors carry out an econometric analysis for the period 1990-2008. They make use of two dynamic panel models in which they group countries with similar characteristics and development levels. In one of them, they include Mexico, Brazil, Chile, Colombia and Uruguay; whereas in the second one the countries accounted for are the U.S., Canada, Spain, Korea, Ireland and Japan. They specify in both models an investment function using as arguments a wide range of variables, including those related with fiscal policy. From their results the authors infer that governments can, with higher spending, boost up the economy even when they finance spending with higher taxes. In Latin America, where income concentration is enormous, a proposal to boost up the economy through higher government expenditure financed with a progressive income tax, is even more justified.

Trade with China and strategy in South American recent economic development

Trade between South America and China has been an important source of the high growth shown by those economies in the 2000s. During the globalization of the 1990s, trade between the region and China had not developed so much. A rather sharp growth in China's presence in world trade since the beginning of the 2000s changed the world trade trends for MERCOSUR countries, or, at least, for many of them. The impact of the increasing trade of agrifood has been very relevant, and different per country. Strategy is another important issue, referring to bilateral relations with China. This country should be seen as a partner in the global trade, and not as a new foreign investor for the region, but this may be different in the context of different national strategies of South American countries.