Vol. 17 No. 2 (1997): Apr-Jun / 1997

Vol. 17 No. 2 (1997)

Apr-Jun / 1997
Published April 1, 1997


Relative prices and international competitiveness
Ruben D. Almonacid, Gabriel A. Scrimini
Brazilian Journal of Political Economy

In the last few years, Brazil has seen its trade balance deteriorate significantly.
Although some people defended these results as a necessary ingredient of the stabilization
and growth process now in course, the fact that a similar experience, lived by Mexico, ended
up in a severe debt crisis in December 1994, represents a serious warning. Trying to differentiate
the two cases some people have argued that the Mexican difficulties originated in an
incorrect political transition. On the other hand, this paper suggests that in both cases, there
is a variable indicative of economic incentives, namely “the relative price of home and tradable
goods”, that could explain the behaviour of the trade balance. Regressions estimated
for the two countries document this conclusion.

JEL Classification: F14; F60.

Evaluation of the Brazilian industrial structure process
José Roberto Mendonça de Barros, Lídia Goldenstein
Brazilian Journal of Political Economy

The interaction of four tendencies (globalization, opening of the economy, stabilization
and privatization) has been breaking the triad composed of state owned, foreign
owned and private family owned enterprises, which was from the fifties to the beginning
of the nineties the mainstay of Brazil ‘s capitalism. Brazilian economy is being subjected to
deep changes that despite difficulties has made feasible the solidification of a new dynamic
of investments which may allow the initiation of sustained growth. This paper was a first
trial to evaluate that process and to define the grounds for a policy of competitiveness and
investments that diversify from the ancient industrial policies practiced in Brazil would help
to minimize the pains of the process and help in making it solid.

JEL Classification: F61; F13; L16; O25.

Industrial policy: theory and practice in Brazil and in the OECD countries
Fabio S. Erber, José Eduardo Cassiolato
Brazilian Journal of Political Economy

The paper analyses the recent development of industrial and technological policies
in Brazil as compared to those adopted in the main OECD countries. The first section
sets the background, presenting a brief description of the evolution of the global economy.
The second section presents the analytical framework of the article. It argues that presently
there are four “industrial policy agendas”, derived from theoretical and political considerations
– ultra-liberal, reformist liberal, neo-developmental and social-democrat. The third
section presents the evolution of the Brazilian industrial and technological policy during
the nineties, examining in more detail the present situation. The fourth section presents the
policies pursued by the main OECD countries (the United States, Germany, Japan, and the
United Kingdom), examining their evolution and focusing on the present pattern of policies.
The last section presents the main conclusions of the paper.

JEL Classification: L52; F63; O25.

Trade liberalization and industry: what to expect and what we have been getting
Mauricio Mesquita Moreira, Paulo Guilherme Correa
Brazilian Journal of Political Economy

The aim of this paper is to assess the impact of trade liberalization on the Brazilian
manufacturing industry over the 1989-96 period. To this end, a series of indicators was
built which shed light on the technical efficiency and allocational effects of the liberalization.
The results obtained suggest that the impacts were, in general, positive and consistent with
both predictions of the literature of the international trade and the pattern of Brazil’s industrialization.
Yet, they also point to a number of challenges to be faced by State, particularly,
with regard to the imperfections that affect international trade in manufacturing and that
threaten the gains from trade.

JEL Classification: F14; F60

Evaluation of the Brazilian iron and steel industry privatization process
Germano Mendes de Paula
Brazilian Journal of Political Economy

This article examines the privatization’s process of Brazilian steel industry, by an
international comparison. It discusses five questions of the process: a) models, methods and
transparency; b) duration; e) restriction to foreign capital; d) special sale for employees; e)
valuation and types of payment accepted.

JEL Classification: L33; L61; L10.

Efficiency wages, insiders-outsiders and wages determination: theories and evidence
Francisco G. Carneiro
Brazilian Journal of Political Economy

The article discusses alternative explanations for the rigidity of real wages in the
presence of involuntary unemployment. It is argued that real wage rigidity can be viewed as
the result of two factors: (i) trade unions’ bargaining power, in the form of insider power;
and (ii) the deliberate action of firms which try to avoid the costs associated with labour
turnover. The article also presents recent empirical evidence on the importance of insider
factors in the process of wage determination for a number of countries.

JEL Classification: J20; J31.

Internet, the national model and an approach to a pricing policy for its operation in Brazil
José Carlos Cavalcanti
Brazilian Journal of Political Economy

The main objective of this paper is to present some economic aspects that have
been taken into account as a basis for the establishment of a pricing policy for the operation
of the internet in Brazil, basically when it is moving from its academic towards its commercial
phase. In this respect, the paper seeks to give an overview of what is the internet and
its model in Brazil, together with the possibilities and potential limits for its growth in the
Brazilian territory. Then, after taking the marginal cost principle as a platform for a pricing
policy for the internet, the paper suggests the second best approach as the most adequate to
the Brazilian social and economic realities.

JEL Classification: L86; O32; O33.

Short Article

Wages, exchange and competitiveness in the Brazilian exports
Carlos Henrique Rocha
Brazilian Journal of Political Economy

The aim of this paper is to investigate empirically the role of wages on Brazilian
exports over the period of major concern with the external front, i. e., between the late
1960s and mid-1980s. We found that wages have contributed to our exports getting in the
external markets.

JEL Classification: F14; J31; J38.