Developmental Macroeconomics: Access to Demand, the Exchange Rate and Growth offers a new approach to development economics and macroeconomics. It is a Keynesian-structuralist approach to economics applied to middle income countries that emphasizes the strategic role of demand in creating investment opportunities that are essential to economic development. It also explores crucial links between short-term full employment and financial stability with medium term growth.
While this book emphasizes the central role played by the exchange rate it does not ignore other macroeconomic prices (the interest rate, the inflation rate and the profit rate). It develops a group of concepts and models and blends them together in the model of the tendency to the cyclical overvaluation of the exchange rate in developing countries. According to this model, the exchange rate tends to be chronically overvalued. In so far that this is true the exchange rate ceases to be just a short-term problem to be treated by macroeconomics and becomes central to development economics and should be crucially oriented to manage the exchange rate and keep it competitive at the industrial equilibrium level.
The book closes with the presentation of new developmentalism – a national development strategy based on the system of models previously discussed that is both an alternative to old national-developmentalism and to liberal orthodoxy or the Washington consensus.
Table of Contents
1. Theoretical traditions and the method 2. Some definitions and productive sophistication 3. Demand-led growth 4. Foreign constraint 5. Value and price of the exchange rate 6. Overvaluation and access to the markets 7. The Dutch disease 8. Domestic, not foreign savings 9. Inflation, interest, and exchange rate appreciation 10. Balance of payment crises Chapter 11 The closing of the model 12. Wage, export or balanced-led? 13. Neutralizing the Dutch disease 14. Exchange rate policy 15. The transition to a high-development regime 16. Political economy of the once-and-for-all devaluation 17. Comparing and summing up
Luiz Carlos Bresser-Pereira is Emeritus professor of Getulio Vargas Foundation, Brazil.
José Luís Oreiro is Associate Professor at Universidade Federal do Rio de Janeiro, Brazil.
Nelson Marconi is Associate professor and Head of Research Center for Structuralist Development Macroeconomics at Sao Paulo School of Economics, Brazil