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

The Two Methods of Economics

A Teoria Econômica Emprega Dois Métodos: o Método Hipotético-Dedutivo, Utilizado Principalmente Pelos Economistas Neoclássicos, e o Método Histórico-Dedutivo, Adotado Pelos Economistas Clássicos e Keynesianos. Ambos são Legítimos, Mas, Desde que a Economia é Substantiva, não uma Ciência Metodológica, Onde o Objeto é o Sistema Econômico, o Método Histórico-Dedutivo é o Mais Apropriado. o Método Hipotético-Dedutivo Permite que o Economista Desenvolva Ferramentas para Analisar o Sistema Econômico, Mas Falha ao Analisar o Sistema como um Todo. em Contrapartida, o Método Histórico-Dedutivo Parte da Observação Empírica da Realidade e da Busca por Regularidades e Tendências. é um Método Empírico, Apropriado para as Ciências Substantivas que Tratam de Sistemas Abertos, como é o Caso da Economia.

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.

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.

From old to new developmentalism in latin America

The failure of the Washington Consensus and of macroeconomic policies based onhigh interest rates and non-competitive exchange rates to generate economic growthprompted Latin America to formulate national development strategies. Newdevelopmentalism is an alternative strategy not only to conventional orthodoxy but also toold-style Latin American national developmentalism. While old national developmentalismwas based on the tendency of the terms of trade to deteriorate and, adopting a microeconomicapproach, proposed economic planning and industrialization, the new nationaldevelopmentalismassumes that industrialization has been achieved, although in differentdegrees by each country, and argues that, in order to assure fast growth rates and catching up,the tendency that must be neutralized is that of the exchange rate to overvaluation. Contraryto the claims of conventional economics, a capable state remains the key instrument to ensureeconomic development, and industrial policy continues to be necessary; but whatdistinguishes the new approach is principally growth with domestic savings instead of withforeign savings, a macroeconomic policy based on moderate interest rates and a competitiveexchange rate instead of the high interest rates and the overvalued currencies prescribed byconventional orthodoxy.

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.