Vol. 42 No. 2 (2022): Apr-Jun / 2022

Vol. 42 No. 2 (2022)

Apr-Jun / 2022
Published May 5, 2022


Exchange rate crises in Latin America, East Asia and Russia
Manmohan Agarwal, T. R. Vandana
Brazilian Journal of Political Economy

A number of developing countries mainly in East Asia and Latin America and
Russia suffered exchange rate crises in the 1990s. We examine the run up to the crisis in
terms of a few macro indicators suggested by various crisis models. We then examine the
aftermath of the crisis, in contrast to most empirical work that concentrates on determining
the causes of crises. We seek to explain the pre-crisis as well as the post-crisis situation
in the light of various crisis models. We find that the first-generation crisis model despite
anomalies seems to fit the crises in Latin American countries whereas it does not fit the
crisis in the Asian countries. The Russian case is different from any of the crisis models.
The crisis eliminated the Dutch disease aspects leading to a large increase in exports and
an improvement in the current account balance. This resulted in a higher growth rate of GDP. We also find that the exchange market pressure index is not successful in predicting
the crises.

JEL Classification: E420; F310; F320.

The compass and the pendulum: development and international insertion of Brazil
Luiz Augusto E. Faria
Brazilian Journal of Political Economy

Changes in the development policies and the international insertion are analyzed.
Starting from 1980s crisis and the first neoliberal cycle, its failure and political change by
Workers Party administration, the work goes on examining PT’s “neodevelopmentalism”
and its aim on changing the country’s role in the international regime. Economic crisis begun
in 2014 and proceeded in the coup of 2016 and the return of neoliberalism. The analysis
goes on dealing with changing class interests and social forces balance of power making the
choice on “neodevelopmentalism” and neoliberalism.

JEL Classification: N46; O54; P16.

Is Inflation Targeting destabilizing? Lessons from Latin America
Emiliano Libman
Brazilian Journal of Political Economy

This paper argues that several aspects of the productive structure and the
macroeconomic policies of Latin American countries, when combined with a Taylor Rule,
may produce too much output volatility and a bias towards real exchange rate overvaluation.
Relaying on a simple Aggregate Demand – Aggregate Supply model, we show that this is a
likely outcome when: a) the real interest rate elasticity of demand is low; b) depreciations
have strong contractionary effects; and c) the exchange rate pass-through is relatively large.
These conditions imply that depreciations are contractionary and a have a strong effect on

JEL Classification: E31; E52; E58.

On the semantic and methodological dimensions of equilibrium in economics
Douglas Dias Braz, Fabio Bittes Terra
Brazilian Journal of Political Economy

This article aims to distinguish different uses of the notion of equilibrium in
various theoretical economic approaches and to establish a classification in the myriad of
interpretations of equilibrium. It does so by categorizing equilibrium in two dimensions:
(i) semantical, which deals with the meaning of the notion of equilibrium in different
theoretical contexts; and (ii) methodological, that sees equilibrium as an analytical tool –
that is, a method for apprehending certain aspects of the economic system. We argue that
the diversity of equilibrium uses hampers the debate among different theoretical perspectives,
making it harder to assess how fruitful this notion can be to the comprehension of economic

JEL Classification: B20; B40; B49.

Celso Furtado’s transdisciplinary view on economic development
Assilio Luiz Zanella de Araujo
Brazilian Journal of Political Economy

The main objective of this work is to bring a different perspective from that
presented in previous works on the “development process” in Furtado’s thought. In line with
his methodological writings, we argue that Furtado extrapolated, in his formulation of the
“development process”, the limits of economic science, thus diverging from conventional
economic growth models. Furthermore, we emphasize that the referred author managed to
combine, in a creative manner, different aspects of the previous formulations on economic

JEL Classification: B30; O10.

Methodological approaches to measuring quality of life
Aygun Guliyeva
Brazilian Journal of Political Economy

The ultimate goal of the present work lay in creating a vector methodology for
measuring QoL. Application of an integrated approach to the results of the classification
analysis and SWOT analysis enabled elaborating a vector methodology of a recommendatory
type aimed at improving QoL measurement approaches. It was established that this
methodology should include four major updates taking into account the challenges of
tomorrow. The study results may be of interest to public authorities responsible for taking
measures directed at raising the country’s international ranking as well as be used for
reducing contradictions on the part of QoL measuring procedures.

JEL Classification: I14; O15; Q56.

Capes’ evaluation and the field of Economics: the primacy of the American orthodox mainstream
Francisco Moraes da Costa Marques
Brazilian Journal of Political Economy

Using the Bourdieusian concept of Field, this article looks at Capes’ evaluation
of graduate programs as an expression of the disputes surrounding the very definition of
what constitutes Economics. Based on extensive documentary analysis, it demonstrates how
the criteria in place are markedly exclusionary. On the one hand, they encourage researchers
to adopt the assumptions of neoclassical liberalism, tested by econometric models, in line
with American mainstream; on the other hand, they punish, in more or less extent, all other possible theoretical, methodological and thematic approaches, hindering the development of
studies built upon the many diverse local Brazilian realities.

JEL Classification: N01; B00; A12.

Domar, the West and Russian economics: a historical perspective
Mauro Boianovsky
Brazilian Journal of Political Economy

The paper discusses Evsey Domar’s role as a link between economics in the West
and in Russia, including his influence on some Brazilian economists. The Russian heritage
he brought with him from Harbin (Manchuria) to the US consisted of an interest in socialism
and Russian history. He paid close attention to the 1947 Varga controversy in the USSR.
Domar’s rediscovery of Feldman’s (1928) growth model in 1957 brought it to the attention of Western and Soviet economists alike. Soviet economic development was also discussed
in his interpretation of Preobrazhensky’s (1926) approach to the interaction between agricultural
and industrial sectors. Domar’s 1966 seminal article on producer cooperatives
called attention to Tugan-Baranovsky’s 1915 book on the topic. Domar’s interest in history
resulted in his 1970 hypothesis about the origins of Russian serfdom and of North and
South American slavery. Soviet economists paid some attention to Domar’s growth models,
especially those involving depreciation and the time structure of capital goods.

JEL Classification: B22; B24; N00.

Digitalization and its impact on economic growth
Ariadna Aleksandrova, Yuri Truntsevsky, Marina Polutova
Brazilian Journal of Political Economy

Digitalization transforms the traditional concepts of economic growth and
competitiveness. This article studies the effect of digitalization on Russia’s economic
growth. As indicators measuring the impact of digitalization processes on economic
growth, the study used the Gross Domestic Product per capita, the Global Competitiveness
Index, the Index of Digital Life, the Digital Adoption Index, and the Resilience Index.
Their in-depth examination based on a three-pronged model showed that the state of the
macroenvironment and the readiness of the population for digital transformation do not
allow digital technologies to affect the economic growth rate seriously.

JEL Classification: F43; O34; O4.

China and the change of the energy matrix in Latin America: a global political economy approach
Oscar Ugarteche, Carlos De León
Brazilian Journal of Political Economy

China is leading the global change in the energy matrix and mainly Latin America.
This change questions the position and leadership of the United States in general and
particularly in Latin America. Evidence shows that the United States lags in energy change
in technical and institutional terms and is anchored heavily in dirty energy. Evidence also
indicates that the US is not allowing China to advance in the region quickly. Power generation
from renewable energy sources is rising, with China leading in solar equipment and
hydroelectric dams while buying out electric distribution networks from US firms. The consequences
for the global economy will be felt on many fronts, from the balance of trade sign change and decreased inflation to currency realignments and power reshuffle as oil prices

JEL Classification: F6; O1; F18; F5; O36; O38.

Employment, technical change and growth in Brazil: a conclusion from Input-Output Matrix
Rafael de Acypreste
Brazilian Journal of Political Economy

The debate on technological unemployment is accentuated when disruptive
innovations gain eminence, as is the recent case of artificial intelligence. However, such
analyses often ignore economic growth and aggregate demand in the treatment of
unemployment. This article analyses what has been happening about the jobs in Brazil from
the structural decomposition of the Input-Output Matrix. What we find is that, except for
agriculture, sectors were job generators from 2000 to 2015. In addition, demand gains were
able to compensate for job losses resulting from technological progress.

JEL Classification: J21; J23; C67; O33.

Brazilian underdevelopment portrayed by its excluding growth dynamics: an empirical analysis based on Celso Furtado
Alanna Santos de Oliveira, Carlos Alves do Nascimento
Brazilian Journal of Political Economy

Celso Furtado’s analysis of Brazilian underdevelopment is widely recognized for
its historical-structural approach, while his macroeconomic analytical bias often receives little
attention. Considering this, in addition to giving emphasis to this perspective of his analysis,
this work aims at carrying out an empirical essay which tests the relationships among the
main variables of the author’s scheme. For this purpose, an SVAR (Structural Vector Autoregressive)
is used with data from Brazilian economy, from 1965 to 2015. The results show
that the tested interrelations are consistent with his macroeconomic interpretation of the
growth process of Brazilian economy in the boundary of underdevelopment.

JEL Classification: O11.

Brazil’s quasi-stagnation and the new developmentalism
Luiz Carlos Bresser-Pereira
Brazilian Journal of Political Economy

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.

JEL Classification: O1; E2; F31; F34; F41.

Does Behavioral Economics substitute or complement Neoclassical Economics? Rethinking the behavioral revolution from a contextualist approach
Josafat Ivan Hernandez-Cervantes
Brazilian Journal of Political Economy

A ascensão da Economia Comportamental levanta uma questão importante: ela
substitui ou complementa a Economia Neoclássica? Este artigo faz uma análise para identificar
como a questão da substituição-complementaridade é altamente sensível ao contexto
epistêmico. Em particular, o artigo distingue quatro contextos epistemológicos: descritivo,
explicativo, preditivo e prescritivo. Defende a ideia de que a abordagem comportamental
substitua a neoclássica em contextos descritivos e explicativos; no entanto, há uma complementaridade
nos contextos preditivo e prescritivo, onde existem alguns domínios em que a
abordagem neoclássica ainda pode funcionar bem.

JEL Classification: A12; B40; B41; D01; D91.