Structuralist macroeconomics and new developmentalism

This paper, first, presents some basic ideas and models of a structuralist development macroeconomics that complements and actualizes the thought of structuralist development economics that was dominant between the 1940s and the 1960s including in the World Bank. The new approach focus on the relation between the exchange rate and economic growth, and develops three interrelated models: the tendency to the overvaluation of the exchange, the critique of growth with foreign savings, and a model of the Dutch disease based on the existence of two exchange rate equilibriums: the “current” and the “industrial” equilibrium. Second, it summarizes “new developmentalism” – a sum of growth policies based on these models and on the experience of fast growing Asian countries

National Development Strategy: the Key Growth Institution

O Crescimento Econômico é Quase que Invariavelmente o Resultado de uma Estratégia Nacional DeDesenvolvimento. o Efetivo Desenvolvimento Econômico Ocorre Historicamente Quando a Nação é UmaNação Forte, e as Diferentes Classes Sociais são Capazes de Cooperar e Formular uma Efetiva EstratégiaPara Promover o Crescimento e Enfrentar a Competição Internacional. uma Estratégia Nacional DeDesenvolvimento é Essencialmente uma Instituição ou um Conjunto de Instituições que Estimulam AAcumulação de Capital e o Progresso Técnico. Segue uma Discussão das Principais Características de TaisEstratégias. o Artigo Finaliza com uma Análise dos Conflitos ou Tensões Envolvidos nas EstratégiasNacionais de Desenvolvimento.

Testing the hypothesis of contagion using multivariate volatility models

The aim of this paper is to test whether or not there was evidence of contagion across the various financial crises that assailed some countries in the 1990s. Data on sovereign debt bonds for Brazil, Mexico, Russia and Argentina were used to implement the test. The contagion hypothesis is tested using multivariate volatility models. If there is any evidence of structural break in volatility that can be linked to financial crises, the contagion hypothesis will be confirmed. Results suggest that there is evidence in favor of the contagion hypothesis.

Testing the long-run implications of the expectation hypothesis using cointegration techniques with structural change

This paper investigates whether or not multivariate cointegrated process with structural change can describe the Brazilian term structure of interest rate data from 1995 to 2006. In this work the break point and the number of cointegrated vector are assumed to be known. The estimated model has four regimes. Only three of them are statistically different.The first starts at the beginning of the sample and goes until September of 1997. The second starts at October of 1997 until December of 1998. The third starts at January of 1999 and goes until the end of the sample. It is used monthly data. Models that allows for some similarities across the regimes are also estimated and tested. The models are estimated using the Generalized Reduced-Rank Regressions developed by Hansen (2003).All imposed restrictions can be tested using likelihood ratio test with standard asymptotic 1 qui-squared distribution. The results of the paper show evidence in favor of the long run implications of the expectation hypothesis for Brazil.

The inequality curse: constraints and political discretion

We live in an unjust world characterized by economic inequality. No liberaltheory of justice is able to justify it. Inequality is not “solved” with equality ofopportunity or meritocracy. Nor by the socialist and republican critique. The poor willhave to count with them and with democracy to make social progress reality. In theirpolitical struggle, they will face one economic constraint: the expected profit rate mustremain attractive to business investors. Yet, giving that technological progress inincreasingly capital-saving, this economic constraint does not obstruct that wages growabove the productivity rate and inequality is reduced. What really is an obstacle to socialjustice in the rich countries is, on one hand, the power that capitalist rentiers retain andfinancists acquired, and, on the other, the competition originated in low wage countries.

Why economics should be a modest and reasonable science

Unlike the methodological sciences such as mathematics and decision theory, which use the hypothetical-deductive method and may be fully expressed in complex mathematical models because their only truth criterion is logical consistency, the substantive sciences have as their truth criterion the correspondence to reality, adopt an empirical-deductive method, and are supposed to generalize from and often unreliable regularities and tendencies. Given this assumption, it is very difficult for economists to predict economic behavior, particularly major financial crises.