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This paper is the history of how the theory of inertial inflation was developed in Brazil in the early 1980s, when inflation was very high, much higher than the stagflation that happened in the United States in the previous decade. Perhaps this fact explains why the theory was formulated in Brazil and not in the United States. The main papers and the book that defined the new theory are duly referred. And the author, that in the 1980s and 1990s was a political actor, also tells the history of the application of the theory, the failures and successes. [ABSTRACT FROM AUTHOR]

In economics, there is just one argument legitimising import tariffs - the infant industry argument -, but it ceases to be valid as the required learning time ends. This note offers a second argument: the neutralisation of the Dutch disease argument. If the country faces this competitive disadvantage, import tariffs and export subsidies may be a way of circumventing the problem. Many countries that industrialised were only successful because they pragmatically neutralised the disease with import tariffs. [ABSTRACT FROM AUTHOR]

This paper proposes a methodology for the estimation of the current account equilibrium exchange rate - the exchange rate that guarantees the intertemporal current account equilibrium for a country. Moreover, the methodology is tested throughout appropriate econometric technics (VECM Models) for Argentina, Brazil, Chile, and Colombia, using quarterly data from around 2000 (according to data availability for each country) to 2020. The model includes both long-term structural variables such as terms of trade, goods and service trade as percentage of GDP and GDP per capita as well short term policy variables such as interest rate differential and EMBI plus. Apart from proposing an innovative methodology for estimating the current account equilibrium exchange rate, the paper brings important insights in terms of chronicle and cyclical appreciation (depreciation) of the exchange rate in LA countries. In addition, it shows high correlation between the exchange rate negative (positive) misalignments and the current account deficits (surpluses) in the countries analyzed. [ABSTRACT FROM AUTHOR]

From the 1980s, Brazil quasi-stagnated while East-Asia continued to grow. What went wrong? Classical developmentalists and post-Keynesians argue the cause was the desertion of the national developmental project based on structural change or industrialization. New-developmental economics agrees but is more specific: two historical new facts reduced investments. In the 1980s, a fiscal crisis of the state defined by negative public savings, broke up. This crisis, which was not resolved, led to the fall of public investments. As to private investments, they also have fallen as a percentage of GDP (when we compare with the 1970). They have fallen due to an action and an omission. The action was the mistaken adoption of growth with foreign indebtedness policy and the consequent excess of capital inflows. The omission was the suspension of the neutralization of the Dutch disease. Both resulted in a long-term overvaluation of the exchange rate and stopped industrialization. [ABSTRACT FROM AUTHOR]

From the 1980s, Brazil quasi-stagnated while East-Asia continued to grow. What went wrong? Classical developmentalists and post-Keynesians argue the cause was the desertion of the national developmental project based on structural change or industrialization. New-developmental economics agrees but is more specific: two historical new facts reduced investments. In the 1980s, a fiscal crisis of the state defined by negative public savings, broke up. This crisis, which was not resolved, led to the fall of public investments. As to private investments, they also have fallen as a percentage of GDP (when we compare with the 1970). They have fallen due to an action and an omission. The action was the mistaken adoption of growth with foreign indebtedness policy and the consequent excess of capital inflows. The omission was the suspension of the neutralization of the Dutch disease. Both resulted in a long-term overvaluation of the exchange rate and stopped industrialization. [ABSTRACT FROM AUTHOR]

In the 1980s, while the East Asian countries continued to grow, the Latin American countries stopped, and since then are falling behind. The cause was not the "middleincome trap", but the "liberalization trap". Differently from the East Asian, the Latin American countries suffer the Dutch Disease, but were able to industrialize because they used high import tariffs on manufactured goods to neutralize this long-term overvaluation of the exchange rate. In the 1980s, however, trade liberalization dismounted this mechanism. The ensuing competitive disadvantage produced deindustrialization and low growth. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to analyze the catching-up processes of South Korea and post-1978 reforms China, based on a new-developmentalist approach that considers four fundamental factors: 1) a complementarity relationship between the state and the market as a dynamic process that changes over time; 2) necessary complementarity between macroeconomic policy and industrial policy; 3) the key role of public and development banks in attacking the problem of "development financing"; and a particular focus on 4) the centrality of exchange rate and balance of payments administration for the development process in these countries. The paper's fundamental question is to what extent the catchingup process in these countries can be understood as the application of a new-developmentalist strategy, taking each country's particular historical traits into account. [ABSTRACT FROM AUTHOR]

• The causes presented in the literature of the middle-income trap are generic, emphasizing the quality of the legal institutions of the country, demographic problems, the lack of social infrastructure, poor macroeconomic policies, etc. were already present in developing countries when they were growing fast. Besides, the income interval used on the studies on the trap was too large. • Instead of promoting the growth, the liberalizing reforms, which were more radical in Latin America than in Asia, caused an increase in the interest rate and dismantled the mechanism that neutralized the Dutch disease – both facts leading to the chronic overvaluation of the exchange rate, which represented a competitive disadvantage of the companies utilizing the best technology available. • In the economic literature, it is well established that the currencies of the commodity-focused economies tend to be appreciated in the long run because they face the Dutch disease. On the other hand, central banks in the region tend to define a high interest rate around which they organize their monetary policy so as to attract foreign capital and "grow with external savings" – this representing a second major cause of overvaluation of the national currencies of Latin American countries. • The main conclusion of the research is that, in the period of 1980–2016, the Latin American countries didn't fall into middle-income but a liberalization trap; the reason why they have fallen into quasi-stagnation while Asian countries did not lie in the liberal reforms. Opening trade in countries that have the Dutch disease meant dismantling the pragmatic mechanisms that neutralized it; financial liberalization limited the ability of countries to control distorted flows of capital and created conditions for the increase in the interest rate. • The instrument to neutralize the Dutch disease on the domestic market side were import tariffs on manufactured goods. To the extent that they were just neutralizing the Dutch disease, they were not protectionist – they were just giving the local manufacturing industry equal conditions of competition with the companies of other countries. If the import tariffs on manufactured goods were higher than what was required to neutralize the Dutch disease, they would be also protectionist. This paper offers an alternative explanation to the slow-down observed in the growth of developing countries. Instead of a middle-income trap what happened was a liberalization trap. Growth didn't happen because countries turned middle-income, but happened in a given period, around the 1980s, when these countries faced a serious foreign debt crisis and were constrained to open their economies. The studies on the middle-income trap have adopted a broad income interval and were unable to offer new historical facts that explained why these countries stop growing fast. Differently, this paper shows that the trade liberalization and the financial liberalization that started in the 1980s involved the dismantling of the mechanism that neutralized the Dutch disease and the change from low to high interest rates – both facts leading to a long-term or chronic overvaluation of the exchange rate that made the manufacturing industry non-competitive and caused deindustrialization and low growth. [ABSTRACT FROM AUTHOR]

Multilateral Development Banks (MDBs) are designed to finance investments that promote global economic and social development. The objective of this paper is to discuss a key component in meeting the demand for investment in developing countries, namely the ability of MDBs to provide loans in local rather than foreign currency. To explain how these institutions fulfill this purpose, we distinguish "traditional" from "new" MDBs, discuss the problems generated from foreign currency indebtedness, and explore a way out, or an alternative explanation, based on New Developmentalism theory and the challenge of local currency financing. [ABSTRACT FROM AUTHOR]

Este artículo tiene por objeto entender el estado desarrollista y el papel histórico que le ha correspondido en las revoluciones industriales y en períodos posteriores. Primeramente se define al estado desarrollista como alternativa al estado liberal. En segundo lugar, se sostiene que las revoluciones industriales siempre se han producido en el marco de un estado desarrollista. En tercer lugar, se definen cuatro modelos de estado desarrollista en función del momento en que tuvo lugar la revolución industrial y del carácter central o periférico del país. Por último, se describe la forma en que el Estado fue apartándose parcialmente de la economía después de la revolución industrial; sin embargo, el estado desarrollista sigue cumpliendo un papel importantísimo en la dirección de la política industrial y en la ejecución de una política macroeconómica activa. [ABSTRACT FROM AUTHOR]

New developmentalism was a response to the inability of classical developmentalism and post-Keynesian macroeconomics in leading middle-income countries to resume growth. New developmentalism was born in the 2000s to explain why Latin American countries stopped growing in the 1980s, while East Asian countries continued to catch up. This paper compares new developmentalism with classical developmentalism, which didn't have a macroeconomics, and with post-Keynesian economics, whose macroeconomics is not devoted to developing countries. And shows that to follow the East Asian example is not enough industrial policy, it is also necessary a macroeconomic policy that sets the five macroeconomic prices right, rejects the growth with foreign savings policy, and keeps the macroeconomic accounts balanced. [ABSTRACT FROM AUTHOR]

New developmentalism was a response to the inability of classical developmentalism and post-Keynesian macroeconomics in leading middle-income countries to resume growth. New developmentalism was born in the 2000s to explain why Latin American countries stopped growing in the 1980s, while East Asian countries continued to catch up. This paper compares new developmentalism with classical developmentalism, which didn't have a macroeconomics, and with post-Keynesian economics, whose macroeconomics is not devoted to developing countries. And shows that to follow the East Asian example is not enough industrial policy, it is also necessary a macroeconomic policy that sets the five macroeconomic prices right, rejects the growth with foreign savings policy, and keeps the macroeconomic accounts balanced. [ABSTRACT FROM AUTHOR]

This paper proposes a classification of economic models into three types: historical, axiomatic and conditional. Historical or empirical models utilize the historical-deductive method, and are generalizations from the economic regularities and tendencies that we find in the real world. Axiomatic models utilize the hypothetical-deductive method; they are syllogisms whose major premise is an axiom – a self-evident truth; they are appropriate for methodological sciences such as mathematics and econometrics. Conditional economic models are likewise syllogisms, but they are suitable for economics because they make for clearer and more precise economic reasoning. The criterion of truth of the substantive sciences is the conformity with reality, of the methodological science, its internal consistency. When a school of economic thought adopts mainly axiomatic models, as is the case with neoclassical economics, it implicitly falls into contradiction because their best representatives believe in the conformity with reality criterion. [ABSTRACT FROM PUBLISHER]

This paper discusses distribution and the historical phases of capitalism. It assumes that technical progress and growth are taking place, and, given that, its question is on the functional distribution of income between labor and capital, having as reference classical theory of distribution and Marx's falling tendency of the rate of profit. Based on the historical experience, it, first, inverts the model, making the rate of profit as the constant variable in the long run and the wage rate, as the residuum; second, it distinguishes three types of technical progress (capital-saving, neutral and capital-using) and applies it to thehistory of capitalism, having the UK and France as reference. Given these three types of technical progress, it distinguishes five phases of capitalist growth, where only the second is consistent with Marx prediction. In the final phase, corresponding to financier-rentier capitalism and neoliberalism, the profit rate recovered from the fall of the 1970s, while wages have been growing below the growth of productivity [ABSTRACT FROM AUTHOR]

This paper argues that the state and the market are the main institutions regulating capitalism and correspondingly, that the form of the economic and political coordination of capitalism will be either developmental or liberal. It defines the developmental state, relates it to the formation of a developmental class coalition and notes that capitalism was born developmental in its mercantilist phase, turned liberal in the nineteenth century, and, after 1929, became once again developmental, but, now, democratic and progressive. All industrial and capitalist revolutions took place within the framework of developmentalism, whereby the state coordinates the non-competitive sector of the economy and the five macroeconomic prices (which the market is unable to make "right"), while the market coordinates the competitive sector. In the 1970s, a crisis opened the way for a short-lived and reactionary form of capitalism, neoliberalism or rentier-financier capitalism. Since the 2008 Global Financial Crisis, the neoliberal hegemony has come to an end and we are now experiencing a period of transition. [ABSTRACT FROM AUTHOR]

This paper distinguishes three types of countries (rich, middle-income, and preindustrial) and focus on the latter, which, in contrast to the other two, didn't complete their industrial and capitalist revolutions. Can pre-industrial countries be governed well and under democracy? Today democracy is a universal value, and, so, these countries are under pressure from the West and from its own society to be democratic, even though they do not dispose of mature enough societies in which the economic surplus is appropriated through the market. In fact, no country completed its industrial and capitalist revolution within the framework of even a minimal democracy. Additionally, pre-industrial countries are extremely difficult to govern because they usually don't have a strong nation and capable states. This double pressure represents a major obstacle to their development. [ABSTRACT FROM AUTHOR]

This paper, first, distinguishes new developmentalism, a new theoretical system that is being created, from really existing developmentalism - a form of organizing capitalism. Second, it distinguishes new developmentalism from its antecedents, Development Economics or classical developmentalism and Keynesian Macroeconomics. Third, it discusses the false opposition that some economists have adopted between new developmentalism and social-developmentalism, which the author understands as a form of really existing developmentalism; as theory, it is just a version of classical developmentalism with a bias toward immediate consumption. Finally, it makes a summary of new developmentalism - of its main political economy, economic theory and economic policy claims. [ABSTRACT FROM AUTHOR]

The history of independent Brazil may be divided into three major state-society cycles, and, after 1930, five political pacts or class coalitions can be identified. These pacts were nationalist; only in the 1990s did the Brazilian elites surrender to neoliberal hegemony. Yet since early in the twenty-first century they have been rediscovering the idea of the nation. The main claim of this essay is that Brazilian elites and Brazilian society are "national-dependent," that is, they are ambivalent and contradictory, requiring an oxymoron to define them. They are dependent because they often consider themselves "Europeans" and the mass of the people as inferior. But Brazil is big enough, and there are many common interests around its domestic market, to make the Brazilian nation less ambivalent. Today the country is seeking a synthesis between the last two political cycles--between social justice and economic development in the framework of democracy. [ABSTRACT FROM AUTHOR]

This paper revisits the original (2008) paper on the Dutch disease, which defined it by the existence of two exchange rate equilibriums (the current and the industrial exchange rate equilibriums). Its novelty is in claiming that, as we have a value and a market price for each good or service, we also have a value and a market price for foreign money. The value is the cost plus reasonable profit corresponding to the exchange rate that makes competitive the country's competent business enterprises; the nominal exchange rates floats around the value according to the demand and supply of foreign money. This basic distinction of the exchange rate in terms of value and in terms of price allows us to understand that the two equilibriums are defined in value terms, and opens room for a clear distinction of the policies that affect the value from the ones that affect the market price of the exchange rate. [ABSTRACT FROM AUTHOR]

This paper is a short survey of the work of Ignacy Sachs - one of the pioneers of structuralist development economics and an outstanding economist dedicated to environmental economics. Sachs is PoHsh and a disciple of Michael Kalecki, but he is aiso a Brazilian and a French, given his strong ties with these rwo countries. He knows the importance of markets in the coordination of the economy, but, as a de-velopmental economist, he atttibutes a key role to economic planning, Only through the dehberate action of the state it will be possible to achieve economic growth, reduction of inequalities, and protection of the environmsnts - only through de-liberate action way men and women will be able to conduct the Spaceship Earth to economic, social and environmental development and assure a decent work to ali. [ABSTRACT FROM AUTHOR]

The history of independent Brazil may be divided in three major political cycles, and, since 1930, we can distinguish five political pacts or class coalitions. Since 1930 these pacts have been nationalist. Only in the 1990s the Brazilian elites surrendered to the neoliberal hegemony. Yet, since the mid 2000s, they are recovering their idea of nation. In fact, the main claim of the essay is that Brazilian elites and the Brazilian society are "national-dependent", i.e., they are ambiguous and contradictory, requiring an oxymoron to define them. Today, it searches for a synthesis between the two last political cycles -- between social justice and economic development in the framework of democracy. [ABSTRACT FROM AUTHOR]

This paper first presents some basic ideas and models of a structuralist development macroeconomics that complements and actualizes the ideas of the structuralist development economics that was dominant between the 1940s and the 1960s. A system of three models focusing on the exchange rate (the tendency to the cyclical overvaluation of the exchange rate, a critique of growth with foreign savings, and new a model of the Dutch disease) shows that it is not just volatile but chronically overvalued, and for that reason it is not just a macroeconomic problem; as a long term disequilibrium, it is in the core of development economics. Second, it summarizes "new developmentalism" - a sum of growth policies based on these models and on the experience of fast-growing Asian countries. [ABSTRACT FROM AUTHOR]

Besides analyzing capitalist societies historically and thinking of them in terms of phases or stages, we may compare different models or varieties of capitalism. In this paper I survey the literature on this subject, and distinguish the classification that has a production or business approach from those that use a mainly political criterion. I identify five forms of capitalism: among the rich countries, the liberal democratic or Anglo-Saxon model, the social or European model, and the endogenous social integration or Japanese model; among developing countries, I distinguish the Asian developmental model from the liberal-dependent model that characterizes most other developing countries, including Brazil. [ABSTRACT FROM AUTHOR]

The article present a project proposal to the Ford Foundation which analyzes the financial instability and overvaluation of the exchange rate in Latin America, particularly Brazil. It mentions that the main objectives of the project is to explore the changes in the world economy and Latin America in consequence of the global financial crisis and the nature of financial crises. The relationship between financial instability, exchange rate an deindustrialization in Brazil is also tackled.

This is a personal account of the definition of "new developmentalism" - a national development strategy alternative to the Washington consensus -, and of a "structuralist development macroeconomics": the sum of models that justifies theoretically that strategy. It is personal account of a collective work involving Keynesian, institutionalist and structuralist economists in Brazil that are forming a new school of thought in Brazil: a Keynesian-structuralist school. It is Keynesian because it emphasizes the demand side or the investment opportunities' side of economic growth. It is institutionalist because institutions obviously matter in achieving growth and stability. It is structuralist because it defines economic development as a structural change from low to high value added per capita industries and because it is based on two structural tendencies that limit investment opportunities: the tendency of wages to grow below productivity and the tendency to the cyclical overvaluation of the exchange rate. [ABSTRACT FROM AUTHOR]

A new Keynesian-struturalist school of thought is emerging in Brazil. It is formed by a Structuralist Development Macroeconomics that offers scientific explanation to New Developmentalism - a national development strategy. In this intervention the author delineates its main theoretical claims and policies. [ABSTRACT FROM AUTHOR]

Structuralist development macroeconomics. This paper presents some basic ideas and models of a structuralist development macroeconomics (the tendencies to the overvaluation of the exchange rate and the tendency of wages to grow below productivity, the critique of growth with foreign savings, and a new model of the Dutch disease) that complement and actualize the thought of the Latin-American structuralist school that developed around ECLAC from the late 1940s to the 1960s. On the other hand, it suggests that a new national development strategy based on the experience of fast growing Asian countries is emerging; and argues that only the countries that adopt such strategy based on growth with domestic savings, fiscal and foreign trade responsibility and a competitive exchange rate will be able to catch up. [ABSTRACT FROM AUTHOR]

The 2008 global financial crisis was a consequence of the processes of financialization, the massive creation of fictitious financial wealth which began in the 1980's, and of the hegemony of a reactionary ideology, neoliberalism, based on the belief of the self-regulating capacity and efficiency of markets. From this crisis a new capitalism will emerge, althought its chacarteristics are hard to foresee. It will not be financial, but the tendencies of the 30 "golden years" toward global and knowledge-based capitalism, and the tendency of expansion of democracy will be among them. [ABSTRACT FROM AUTHOR]

The 2008 global financial crisis was the consequence of the process of financialization, or the creation of massive fictitious financial wealth, that began in the 1980s, and of the hegemony of a reactionary ideology, namely, neoliberalism, based on self-regulated and efficient markets. Although capitalism is intrinsically unstable, the lessons from the stock-market crash of 1929 and the Great Depression of the 1930s were transformed into theories and institutions or regulations that led to the "30 glorious years of capitalism" (1948-1977) and that could have avoided a financial crisis as profound as the present one. It did not because a coalition of rentiers and "financists" achieved hegemony and, while deregulating the existing financial operations, refused to regulate the financial innovations that made these markets even more risky. Neoclassical economics played the role of a meta-ideology as it legitimized, mathematically and "scientifically", neoliberal ideology and deregulation. From this crisis a new capitalism will emerge, though its character is difficult to predict. It will not be financialized but the tendencies present in the 30 glorious years toward global and knowledge-based capitalism, where professionals will have more say than rentier capitalists, as well as the tendency to improve democracy by making it more social and participative, will be resumed. [ABSTRACT FROM AUTHOR]

The two methods and the hard core of economics. While methodological sciences have no object and are supposed to adopt a hypothetical-deductive method, substantive sciences including economics should use an empirical or historical-deductive method. The great classical economists and Keynes did that and were able to develop open models explaining how equally open economic systems work. Thus, the hard core of relevant economics is formed by the classical microeconomics and the classical theory of capitalist economic growth, and by Keynesian macroeconomics. In contrast, neoclassical economist aiming to build a mathematical science wrongly adopted the hypothetical-deductive method, and came to macroeconomic and growth models that do not have practical use in policymaking. The exception is Marshall's microeconomics that does not provide a model of real economic systems, but is useful to the analysis of markets. [ABSTRACT FROM AUTHOR]

Globalization and nation-states are not in contradiction, since globalization is the present stage of capitalist development, and the nation-state is the territorial political unit that organizes the space and population in the capitalist system. Since the 1980s, Global Capitalism constitutes the economic system characterized by the opening of all national markets and a fierce competition between nation-states. Developing countries tend to catch up, while rich countries try to neutralize such competitive effort, using globalism as an ideology, and conventional orthodoxy as a strategy. Middle-income countries that are catching up in the realm of globalization are the ones that count with a national development strategy. This is broadly the case of the dynamic Asian countries. In contrast, Latin American countries have no longer their own strategy, and grow less. To add data to the argument, the author conducts an econometric test comparing these two groups of countries, and three variables: the rate of investment, the current account deficit or surplus that would indicate or not a competitive exchange rate, and public deficit. [ABSTRACT FROM AUTHOR]

The left usually wins elections in Brazil but eventually does not govern. In order to validate this claim, the paper, first, reviews the concept of left and right, defining the left political groups by their disposition to risk social order in the name of social justice. Second, the paper argues that in modern democracies there is no inconsistency between a left coalition and capitalism. Third, it says that in Brazil the experience shows that the left indeed wins elections but does not govern. [ABSTRACT FROM AUTHOR]

In developed countries, democracy was liberal during the first half of the XXth century and social democratic during the second. At the present moment, it is in transition to republican or participative democracy. Liberal democracy was elitist, and social democracy was pluralist, since on it the general opinion of electors has become the main preoccupation of politicians. Lately, democracy is becoming republican or participative because citizens attempt more and more at influencing political decision through civil society organizations. In the future, one could think about a deliberative democracy, since public debate is enhanced, political advocacy gets stronger and the responsibility of politicians is reinforced. A brief review of the literature concerning participative democracy states the argument. [ABSTRACT FROM AUTHOR]

The September 11th episode marked the end of the Balance of Powers Diplomacy, through which the nation-states defined themselves as enemies and solved their problems with war or war threat. Slowly Globalization's Politics replace the previous system, as long as the rule of law emerges at international level. Globalization is inherently unjust to the poor countries: unable to compete in a world where competition prevails, such countries are either just outside the system or, frustrated, recur to terrorism. Interests, however, do not point out only in the direction of inequalities. Through politics, it will be possible to create a less unjust international law system, and even an international government. [ABSTRACT FROM AUTHOR]

A fourth kind of citizens' rights—the republican rights—are being recognized and enforced in the last quarter of the twentieth century, after the civil, political, and social rights have been defined. Republican rights are the rights that every citizen has that the public patrimony, the res publica , is utilized on behalf of the public interest. While civil rights protect citizens against a powerful state, republican rights protect the state against powerful citizens involved in several forms of rent-seeking. Three major types of republican rights are identified: rights to the environment, to the historical patrimony, and to the economic patrimony. The last, in flow terms, corresponds to the state's revenues, which are permanently threatened by businessmen, bureaucrats, and all kinds of special interest groups, sometimes in subtle ways. To identify and contain these threats is a major challenge for modern institutions and law systems. [ABSTRACT FROM AUTHOR]

The adequate way of neutralizing the Dutch disease is the imposition of a variable tax on the export of the commodity that originates the disease. If such tax is equivalent to the "size" of the Dutch disease, it will shifts to the right its supply curve of the commodity in relation to the exchange rate, giving the existing domestic supply and the international demand, the exchange rate will depreciate at the value of the tax, and the equilibrium exchange rate will move from the "current" to the "industrial" equilibrium. [ABSTRACT FROM AUTHOR]