Category: Latin America

Economic Development in the 21st Century: A Review

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by Ramiro Eugenio 脕lvarez (University of Siena) and聽Santiago Jos茅 Gahn (Roma Tre University)

What drives economic development? What is the nature of the external constraints that developing economies face? What is the role of industrial policy and the central banks in the development process? These were the core questions that were posed in the recent webinar series on Development in the 21st Century, organized by the of the . These four meetings were particularly oriented towards examining notions such as distribution, patterns of specialization, industrial policies and balance of payment constraints. The discussion of such phenomena is especially important in a context of deep academic divides regarding the drivers of economic development.

Following the tradition of the Latin American structuralist school, the meetings placed special emphasis on the inherent challenges of conditions associated with being in the periphery when the problem of development is faced. During the meetings, processes of economic integration that perpetuate asymmetric economic relations of the center-periphery type were examined, as well as the role played by public institutions, e.g. central banks, in the development of industrial economies.Read More »

Currency crisis in Argentina or the IMF鈥檚 tango

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By Roberto Lampa and聽狈颈肠辞濒谩蝉 贬别谤苍谩苍 Zeolla

The Argentinian government has requested financial assistance from the IMF to tackle the consequences of a serious currency crisis. Last Wednesday, the government emphatically announced the new terms of such an agreement. However, unpacking the terms of those agreements and the current situation reveals serious concerns about the country’s future .

A few months back (), we provided an analysis of the current Argentinian crisis, highlighting the excessive vulnerability of the economy produced by the abrupt financial deregulation carried out by Macri鈥檚 administration.聽Three aspects in particular threatened the country’s future prospects: the deregulation of foreign exchange that failed to stop capital flight, a boom in foreign debt (at a record level among emerging market economies) and the promotion of speculative capital inflows to carry trade (buying financial instruments issued by the Central Bank聽called LEBAC in order to pursue carry trade operations).

When international conditions worsened and the carry trade circuit came to an end, the 鈥淟EBAC bubble鈥� exploded and produced a tremendous foreign exchange crisis that shook the Argentine economy, causing a sharp rise in inflation and a severe recession from which the country has not yet managed to escape. Read More »

Brazil鈥檚 Election in the Shadow of the Impeachment

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Earlier this month the final deadline arrived for political parties in Brazil to register their candidates for the presidential election in October 2018. The official launch of candidates allows us to discuss more concretely the political forces and players that will be shaping the election. It means that coalitions, alliances, and vice-president choices have taken place. So we asked, what can be said about the first candidates leading the polls? What are the main political forces underlying this election?

The Brazilian political landscape has been extremely polarised since the impeachment of president Dilma Rousseff in 2016. If the left-right dichotomy has recently been considered blurry or outdated, in Brazil one can argue that, due to the impeachment, this dichotomy has a new face, with the coup winners on one extreme and the coup losers on the other.

The nuances between right and left on the political spectrum have largely been overshadowed due to this dichotomy, with one side leading a for a clean and corruption-free country and the other side highlighting the . The political mayhem reached its peak with Lula’s trial and conviction in April, which has led to a great deal of uncertainty over this period (see recent Lula鈥檚 from prison in the NYT).

President Termer may have been able to 鈥渒eep the markets calm in鈥� throughout such political instability, but Brazil鈥檚 economic recovery has been , hardships for many families have increased (see IBGE indicators for increases in , , and ) and the country has just set a new record for homicides at in 2017, with violence against women also increasing. There is a lot at stake in this election.Read More »

The Financialization Response to Economic Disequilibria: European and Latin American Experiences

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Book review of N. Levy-Orlik & E Ortiz (2016), The Financialization Response to Economic Disequilibria: European and Latin American Experiences, Edward Elgar Publishing: Cheltenham UK

Levy and Ortiz鈥檚 is a timely book. It critiques mainstream economic theory and its limitations in explaining how economic conditions change or the transition from one state of equilibrium to another. Its analyses rely on Keynes, Kalecki, Kaldor, Minsky, Prebish, Furtado, and Marxists such as Luxemburg, Marini and Lapavitsas. Macroeconomic teachers interested in a heterodox approach may benefit from Levy and Ortiz鈥檚 book as complementary material with experiences showing the dysfunctionality of the global economy from the specific prism of financial disequilibria.

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Can Latin America Learn from Europe鈥檚 Mistakes? Divergence in Regional Economic Integration

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By Collin Constantine (Kingston University) and Johanna Renz (University of Oxford)

A powerful core and a powerless periphery 鈥� these are features of the European Monetary Union (EMU). The union has gone much further than Latin America and the Caribbean (LAC) in its integration efforts and has suffered from a severe economic crisis. Since LAC鈥檚 economic integration is still ongoing, it can and should learn from the EMU鈥檚 mistakes before it is too late.

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Is Development Possible In Capitalism?

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By Douglas McDonald [re-blog from ]

Last Friday was the Debating Development conference, organized by the titular scholars of , a group coordinated by NSSR鈥檚 own Ingrid Kvangraven. The conference put many scholars of different regions and different theoretical perspectives in conversation. Although it was titled 鈥渄ebating development,鈥� as NSSR economics professor Sanjay Reddy noted in his opening remarks, most of the perspectives presented were more intersecting than mutually exclusive, so the conference could also be understood as a means to compound or complexify perspectives, rather than adopt or discard them.

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