Vol. 12 No. 3 (1992): Jul-Sep / 1992

Vol. 12 No. 3 (1992)

Jul-Sep / 1992
Published July 1, 1992


Argentina: Cavallo, lope for disaster?
Joaquim Elói Cirne de Toledo
Brazilian Journal of Political Economy

This paper analyses the latest stabilization effort in Argentina, the Cavallo Plan
(named after its mentor, Domingo Cavallo). The analytical framework is the tradeable – non
tradeable textbook model, also known as the dependent economy model, from the Australian
trade literature. The model is extended to include the effect of real wages on aggregate
demand, and therefore on activity. A Phillips curve description of inflation is also added. It
is shown that, by moving from a floating to a fixed-exchange rate regime, the Argentinian
economy attained domestic equilibrium, at the cost of balance of payments equilibrium. The
paper shows that the ensuing trade deficit may lead to a classical run on reserves, forcing the
return to floating exchange rates. In the process, the economy will go through a complete
economic cycle, returning to inflation.

JEL Classification: E31; F31.

Latin America between two crises
Aníbal Pinto
Brazilian Journal of Political Economy

This work, to begin with, draws attention to the clear contrast between the
intensity and evolution of the crisis of the thirties and the one that bursts into the early eighties,
originating the so-called “lost decade” which, in fact and except for few exceptions, has
not yet been overcome. Several main issues are emphasized. On the one hand, the incidence
of the first crisis was substantially more serious than the second. On the other, the external
circumstances were more disadvantageous and prolonged due to the repercussion of the crisis
on the “central economies” and the incidence of the Second World War. In spite of these
circumstances, most of the Latin American countries could initiate their recuperation and
maintain their so-called “inward development” up to, approximately, the sixties. In the last
part, after analysing different facts which influenced the evolution – mainly, the role played
by the central economies in the two recalled crisis –, emphasis is made on the fact that we
“live in another Latin America” and that it is necessary, above all, to constitute other sociopolitical
agglomerations inherent to the internal and external realities of present time.

JEL Classification: E66; N16.

Government consumption, foreign interest and repressed investment: the problem of external debt revisited
Fábio Giambiagi, José Carlos Gomes Soares
Brazilian Journal of Political Economy

This paper analyses the evolution of Brazilian public sector expenditures during
the second half of the 1980’s. The interpretation according to which the fiscal crisis is
exogenous and caused by the external debt interest is criticized. The great increase in current
expenditures after 1984, together with a budget restriction that limited public investment is
discussed. Based on it, public sector consumption and not external debt interest payments is
considered the most important factor responsible for the public investment trajectory over
time during the last five years.

JEL Classification: F31; F34; H63.

Agricultural commercialization and capitalist development in Brazil
Renato Sérgio Maluf
Brazilian Journal of Political Economy

This paper presents an alternative view of agricultural commercialization in the
capitalist development process in Brazil, in contrast with the functionalist approach derived
from neoclassical economic theory. Agricultural commercialization is a capital circulation
activity whose form depends on the social organization of agricultural production and the
development of capital concentration, both determined by the modernization process of
the Brazilian economy. The conclusion remark upon the tendency toward subordination of
circulation activities, the growing importance of different types of capital (agrarian, commercial,
agroindustrial and “entrepreneurial cooperatives”) and of the financial appreciation
of capital used in agricultural production and circulation.

JEL Classification: Q13.

Accelerating, maintaining and sanctioning factors of inflation: a test of empirical evidence for Brazil
Neio Lúcio Peres Gualda
Brazilian Journal of Political Economy

The objective of this paper is to test empirically the theoretical formulation of
Bresser-Pereira & Nakano’s article, “The accelerating, maintaining and sanctionating factors
of inflation” (1984). The empirical test supports the results of their theoretical study. The role
of the distributive conflict as a maintaining factor in the inflation process stands out since past
inflation creates strong downward price rigidity. Another hypothesis that was shown to be
consistent refers to the character of money as it represents an endogenous variable in the system.

JEL Classification: E31; E37.

The new technological strategies of multinationals in the telecommunications sector
Anne-Marie Maculan
Brazilian Journal of Political Economy

The industry of telecommunications equipment is considered a strategic high-technology
sector and needs large long-time investments in R&D. During the last three decades,
the technological strategies of multinationals corporations which control 80% of the world
market has been shaped according to two patterns. During the 60’s and 70’s, the telecommunications
public administration used to select the technical basis of the main equipment systems,
to finance and realize R&D projects jointly with local firms, to allocate them the public
purchases. This has permitted to strengthen the local firms on the national and international
markets. Since the 80’s, fusions, mergers and technological agreements traduce a concentration
process. Japanese and European corporations intensify their direct investments in the US
market. The competition grows rapidly in the deregulated small equipment market.

JEL Classification: L96; L52.

1992 – The necessary stabilization
Luiz Carlos Bresser-Pereira
Brazilian Journal of Political Economy

This essay tries to respond to the question: what is the reason for Brazil be
unable to stabilizes its economy? Three complementary responses can be assessed: i) a fiscal
adjust is necessary but not enacted; ii) there is not sufficient technical capacity; and, iii) the
country lacks political will. These are not mutually exclusive and are treated along the text
at the same time it is shown that the gradualist approach is not possible.

JEL Classification: E31; E42.


Currency in a common research program for post-keynesianism and neo-ricardianism
Marc Lavoie
Brazilian Journal of Political Economy

An attempt is made to differentiate neoclassical theory from a synthesis of
post-keynesianism and neo-ricardianism, called here post-classical theory. The neoclassical
research program relies on four essentials: instrumentalism, individualism, exchange, and
unbounded rationality. The post-classical program (which also includes institutionalists and
radicals) relies on the opposite essentials: realism, organicism, production, and procedural
rationality. Monetary theory is given as a case example of these dichotomies. It is shown that
post-Keynesians and neo-Ricardians have convergent views on the endogeneity of money
and the conventional character of interest rates.

JEL Classification: B41; B24.


Economic history, economic theory and applied economics
Tamás Szmrecsányi
Brazilian Journal of Political Economy

This note deals with the importance of economic history in the making of an
economist. With the help of great professionals of the past, notably Schumpeter and Kula,
the paper shows that without great understanding of the past there can be no consistent
analysis of present (and future) economic factors.

JEL Classification: B20; B41; A22.

The national division of labor: socioeconomic conditions
Anita Kon
Brazilian Journal of Political Economy

.In order to aid public and private quest of economic modernisation, this article
aims to analyse theoretical aspects related to social and economic determinants of national
division of labor in a society. It presents a reflection about the elements which condition
workers occupational distribution. It observes that this distribution shows a structural configuration,
with defined patterns for each level of economic development. The questions here
examined concern to the meaning of structure as the configuration of labor force adjustment
to different technologies and how its composition arises from the economic system insertion
in the wider macrosocial context.

JEL Classification: J81; J82.