Cycles, Economic Structures and External Constraints: A Structuralist Study on the Causes of Economic Volatility in Latin America

The main objective of this book is to understand the causes behind the endogenous volatile behavior of Latin American economies in a New-Structuralist perspective. Many distinct authors argue that the repetition of strong boom-bust dynamics is a structural problem in the economic development of Latin America. In this research we search for the underlying causes of this behavior, discussing volatility as an endogenous phenomenon, intrinsic to the characteristics of these fragile economies. We assess this research question following empirical and theoretical approaches. The empirical approach initially consists on identifying the main characteristics of economic growth cycles in Latin America from real Gross Domestic Product (GDP) data. Secondly, we test the assumptions of the models developed in this thesis. Thirdly we check how the economic system behaves when there are exogenous shocks to some specific variables

Restricciones vinculadas a la inestabilidad y trampas del desarrollo: un análisis empírico de los ciclos de crecimiento y la volatilidad económica en América Latina y el Caribe

Este artículo presenta una investigación empírica sobre la volatilidad económica de América Latina y el Caribe, comparándola con la de otras regiones. Primero se utiliza un filtro pasabanda asimétrico para descomponer series cronológicas de crecimiento del PIB en ciclos de diferentes tipos de 136 países, usando datos de Maddison Project Database del período 1950-2018. Después se utilizan métodos de agrupamiento k-medias para clasificar patrones de volatilidad. En la mayoría de los países de la región, la volatilidad se explica por el dominio relativo de ciclos económicos largos vinculados a una fuerte dependencia de las exportaciones de productos básicos, con cambios en la especialización resultado de cambios impulsados por la tecnología en los insumos utilizados por los países a los que exportan. Pese a lo que se afirma en la literatura, la región no es la más volátil del mundo, pero sus países tienen muchas características particulares comunes

Restricciones vinculadas a la inestabilidad y trampas del desarrollo: un análisis empírico de los ciclos de crecimiento y la volatilidad económica en América Latina y el Caribe

Este artículo presenta una investigación empírica sobre la volatilidad económica de América Latina y el Caribe, comparándola con la de otras regiones. Primero se utiliza un filtro pasabanda asimétrico para descomponer series cronológicas de crecimiento del PIB en ciclos de diferentes tipos de 136 países, usando datos de Maddison Project Database del período 1950-2018. Después se utilizan métodos de agrupamiento k-medias para clasificar patrones de volatilidad. En la mayoría de los países de la región, la volatilidad se explica por el dominio relativo de ciclos económicos largos vinculados a una fuerte dependencia de las exportaciones de productos básicos, con cambios en la especialización resultado de cambios impulsados por la tecnología en los insumos utilizados por los países a los que exportan. Pese a lo que se afirma en la literatura, la región no es la más volátil del mundo, pero sus países tienen muchas características particulares comunes

Supply and demand in Kaldorian growth models: a proposal for dynamic adjustment

This paper analyses the dynamic adjustment of supply and demand in Kaldorian growth models. We aim at discussing how the growth rate of a country, given by demand constraints, adjust towards the growth rate given by the supply-side, and vice-versa, presenting the necessary conditions for those adjustments. Our main conclusion is that if there are no capital constraints, firms invest to maintain a constant desired level of capital utilization. Depending on specific conditions, however, an economy may face labour constraints, which would require an adjustment mechanism on employment. The Palley-Setterfield approach brings a possible reconciliation to supply- and demand- long-term growth rates. However, we must raise some considerations about the labour market in order to understand the characteristics of this approach. We draw from the critique by McCombie, in which employment adjusts immediately to guarantee equilibrium between supply and demand. We propose reconciliation between the Palley-Setterfield and the McCombie approaches, presenting a model focused in a labour market adjustment, in which both types of adjustments represent extreme cases, discussing the existence and the characteristics of intermediate cases

Natural, Effective and BOP-Constrained Rates of Growth: Adjustment Mechanisms and Closure Equations

The interaction between the effective (yE) and the natural rates of growth (yN) is a central part—implicitly or explicitly addressed—in all growth models. A stable equilibrium requires these two rates to converge; otherwise, one or more key macroeconomic variables would be rising or falling without bounds. In addition, the Keynesian tradition stressed the key role of the Balance-of-Payments constraint as a determinant of the equilibrium growth rate in the long run (yBP). This paper discusses alternative mechanisms through which these three growth rates converge and relates them to different theoretical approaches to the determinants of growth. With this objective, we extend the model suggested by Setterfield (2010) to include the evolution of the North-South technology gap and the pattern of specialization as key components of the Kaldorian productivity regime. The importance of the National System of Innovation in shaping the learning parameters and outcomes of the model is stressed, drawing from the Schumpeterian literature. A successful development strategy may emerge when the NSI enhances indigenous technological capabilities that allow the South economy to catch-up with the technological frontier

Unveiling structure and dynamics of global digital production technology

This research pioneers the construction of a novel Digital Production Technology Classification (DPTC) based on the latest Harmonised Commodity Description and Coding System (HS2017) of the World Customs Organisation. The DPTC enables the identification and comprehensive analysis of 127 tradable products associated with digital production technologies (DPTs). The development of this classification offers a substantial contribution to empirical research and policy analysis. It enables an extensive exploration of international trade in DPTs, such as the identification of emerging trade networks comprising final goods, intermediate components, and instrumentation technologies and the intricate regional and geopolitical dynamics related to DPTs. In this paper, we deploy our DPTC within a network analysis methodological framework to analyse countries' engagements with DPTs through bilateral and multilateral trade. By comparing the trade networks in DPTs in 2012 and 2019, we unveil dramat ic shifts in the global DPTs' network structure, different countries' roles, and their degree of centrality. Notably, our findings shed light on China's expanding role and the changing trade patterns of the USA in the digital technology realm. The analysis also brings to the fore the increasing significance of Southeast Asian countries, revealing the emergence of a regional hub within this area, characterised by dense bilateral networks in DPTs. Furthermore, our study points to the fragmented network structures in Europe and the bilateral dependencies that developed there. Being the first systematic DPTC, also deployed within a network analysis framework, we expect the classification to become an indispensable tool for researchers, policymakers, and stakeholders engaged in research on digitalisation and digital industrial policy

Unveiling structure and dynamics of global digital production technology

This research pioneers the construction of a novel Digital Production Technology Classification (DPTC) based on the latest Harmonised Commodity Description and Coding System (HS2017) of the World Customs Organisation. The DPTC enables the identification and comprehensive analysis of 127 tradable products associated with digital production technologies (DPTs). The development of this classification offers a substantial contribution to empirical research and policy analysis. It enables an extensive exploration of international trade in DPTs, such as the identification of emerging trade networks comprising final goods, intermediate components, and instrumentation technologies and the intricate regional and geopolitical dynamics related to DPTs. In this paper, we deploy our DPTC within a network analysis methodological framework to analyse countries' engagements with DPTs through bilateral and multilateral trade. By comparing the trade networks in DPTs in 2012 and 2019, we unveil dramat ic shifts in the global DPTs' network structure, different countries' roles, and their degree of centrality. Notably, our findings shed light on China's expanding role and the changing trade patterns of the USA in the digital technology realm. The analysis also brings to the fore the increasing significance of Southeast Asian countries, revealing the emergence of a regional hub within this area, characterised by dense bilateral networks in DPTs. Furthermore, our study points to the fragmented network structures in Europe and the bilateral dependencies that developed there. Being the first systematic DPTC, also deployed within a network analysis framework, we expect the classification to become an indispensable tool for researchers, policymakers, and stakeholders engaged in research on digitalisation and digital industrial policy

Patterns of Growth in Structuralist Models: The Role of Political Economy

This paper presents a set of growth and distribution models in developing countries which reflect distinct political economy regimes. These regimes give rise to different institutional frameworks that affect macroeconomic outcomes. We focus on three cases: (1) a pure developmentalist state, (2) conflicting claims between workers and the government, and (3) financialization under a neoliberal coalition. The equilibrium growth rate is defined, following the Keynesian tradition in open economy growth model, by the Balance-of-Payments constraint (Thirlwall, 1979). The paper relies on cumulative causation à la Kaldor in periods in which the depreciation of the real exchange rate raises temporarily the BOP-constrained equilibrium rate of growth. The transition between one equilibrium level of the RER to another allows (under certain conditions) for a process of learning that transforms the income elasticity of exports and hence the BOP-constrained rate of growth in the long run. The model produces a variety of outcomes that help explain the contradictory results reported in the empirical literature associated with different constellations of power and institutions