Vol. 9 No. 1 (1989): Jan-Mar / 1989

Vol. 9 No. 1 (1989)

Jan-Mar / 1989
Published January 1, 1989


From chronic inflation to hyperinflation: observations on the current situation
André Lara Resende
Brazilian Journal of Political Economy

This article makes a classification of inflation processes. Moderate inflation is
a phenomenon represented by Phillip’s Curve. In chronic inflation, inertial and backward-looking
indexation are major factors. Hyperinflation eliminates backward-looking indexation
and is dominated by expectation and the public factor financial difficulties. It is argued
that although the public inflation factor deficit is not always the primary cause of chronic
inflation, in later stages no government deficit whatsoever can be financed. The lack of alL
sources of public factor financing is what characterizes the transition to hyperinflation. The
current Brazilian scene is analysed.

JEL Classification: E31.

Idle resources and economic cycle: alternatives for the Brazilian crisis
Ignácio Rangel
Brazilian Journal of Political Economy

This article shows that the specific conditions for revolutionary changes in the
Brazilian society are reaching maturity. The alliance of classes which commands the State
cannot govern anymore because the social body does not want to be governed as it was
before. The general violation of social order is a manifestation of this situation and have its
origins in the contradiction between the latifundio and the industrialization which was characterized
by large excess supply of labor. The current recessive phase of the business cycle is
characterized both by the strong idle capacity in the heavy industry and the large bottleneck
in the public services sector. The privatization of public services as well the reformulation of
financial intermediation is the solution which is coming out because the financial crisis of the
State is the weak link of the economic system.

JEL Classification: E32; H12; H11.

Reflections on the organization of the agricultural labor market
Basilia Maria Baptista Aguirre, Ana Maria Bianchi
Brazilian Journal of Political Economy

This article touches upon the subject of the organization of the rural labor market
in Brazil in the past 30 years. It discusses the interplay between technical change, seasonal
demand of labor and increase of the number of temporary workers. Temporary workers
recruited through agents are compared to those directly engaged. The last part of the article
covers a preliminary discussion on the conditions presented by temporary workers for collective

JEL Classification: R23; Q12; J43.

The exchange rate policy under discussion
Álvaro Antônio Zini Júnior
Brazilian Journal of Political Economy

Indicators for Brazil’s real exchange rate are calculated using different definitions
and focusing on what happened to such indices during the Cruzado plan. The real
effective exchange rate shows little appreciation in 1986 although the Cruzado/Dollar rate
did appreciate. The result is troubling in the light of a 25% decrease in Brazil’s trade surplus
in 1986. The paper argues that the net trade balance is explained by three variables: the real
effective exchange rate, domestic real income and real income in the rest of the world. An
econometric exercise shows strong income effects, effects that are ignored by the policy of
minidevaluations. The paper then looks at the suggestion of a dual exchange rate regime for
Brazil and concludes that such a system is likely to bring more instability to the economy.
An alternative proposal of a “planning approach” to the exchange rate policy is delineated.

JEL Classification: F14; F31.

Urbanization, its crisis and revision of its planning
Wilson Cano
Brazilian Journal of Political Economy

This article discusses the urbanization process in São Paulo State in the period
of 1930-1980. It presents the origin of the reproduction, in the interland of São Paulo, of the
accelerated urbanization, the industrial “decentralization, and the exacerbation of the social
problem, It also suggests alternative policies for the urban problem.

JEL Classification: R23; N36.


The reversal of classical wage theory
Antonio Carlos Alves dos Santos
Brazilian Journal of Political Economy

This paper discusses that Ricardo’s and Marx’s wages theory, very similar, are
not appropriated to explain the wages in the modern capitalism. We propose that Sraffa’s
theory is much more appropriated to discuss it in the modern capitalism. To him the profit
rate is seen as an independent variable while wages are considered as a residual one.

JEL Classification: B12; B24

A note on the logical refutation of neoclassical macroeconomics
Gilson Schwartz
Brazilian Journal of Political Economy

Neoclassical theories are often criticized from an externalist point of view (political,
sociological, historical, etc.). Internal inconsistencies are said to be impossible, for
given some premises “neoclassical analysis is logically coherent “, This note stands against
this generally held conception by reviewing one of the possible logical criticisms of neoclassical
macroeconomics. Bernard Schmitt, a Swiss economist known as a late Keynesian, has
written on the subject. His argument starts out with a discussion of time in economic theory
and its relation to standard national accounting. The conclusion is that neoclassical macroeconomics
is rooted in some illegitimate metaphor between prices and quantities adjustments.

JEL Classification: B41; B21.


Technologial policies in Europe
Roy Rothwell
Brazilian Journal of Political Economy

While governments in the advanced market economies have for many years been
involved in the formulation of policies designed to stimulate scientific advance and technological
change, it was not until the mid-1970s that explicit “innovation” policies emerged. Innovation
policy represented an integration of the more traditional “industrial policy” and “science
and technology policy”. During the early 1980s public policy emphasis once again shifted
when governments began to introduce so-called “technology policies”. Technology policy involves
the selection and development of particular generic technologies or high-technology
product groups. Today all advanced European economies have adopted technology policies for
the support of information technology and biotechnology. This article discusses and compares
technology policies in the United Kingdom, France, and the Federal Republic of Germany, as
well as policies operating at the European level promulgated by the EEC.

JEL Classification: O38; O30.

Notes and Comments

A symposium on income distribution
Eduardo Matarazzo Suplicy
Brazilian Journal of Political Economy

This is a readout of the international symposium of income distribution where
the author displays its proposition about the effects that income inequality has in Brazil
and in the world.

JEL Classification: D31.

To overcome the crisis
Helio Jaguaribe
Brazilian Journal of Political Economy

This is a project made by economists and sociologists from the PSDB – The Party
of the Brazilian Social Democracy – to overcome the crisis the Brazilian economy faces.

JEL Classification: E60.