Latin American Economic Development

Description

Latin America is one of the most intriguing parts of the world. The region’s illustrious history, culture, and geography are famous internationally, but in terms of economics, Latin America has been generally associated with problems. For many, the combination of a resource-rich region and poor economic conditions has been a puzzle. This extensively revised and updated third edition of Latin American Economic Development continues to provide the most up-to-date exploration of why the continent can be considered to have underperformed, how the various Latin American economies function, and the future prospects for the region. The book addresses the economic problems of Latin America theme by theme. Cover Half Title Series Information Title Page Copyright Page Table of contents Figures Tables Boxes Acknowledgments Preface 1 Latin America and the world economy Introduction Latin America and the world The economic output of Latin America GDP per capita in Latin America Latin America and international trade Capital flows and Latin America Latin America and world resources Latin America and the world: a summary Recurring themes in Latin American economic development Key terms and concepts Questions for review and discussion Notes References Recommended reading 2 Latin American economic history Introduction The colonial period Gold and silver Agriculture Landownership patterns Mercantilism Brazil: variations on a theme Institutions and economic growth Independence and postcolonial turmoil The golden age, 1870–1914 Wars and depression Import substitution The Lost Decade of the 1980s Key terms and concepts Questions for review and discussion Notes References Recommended reading 3 Economic growth and Latin America Introduction Institutional basics Property rights The protection of intellectual-property rights The rule of law Enforcement of contracts Judicial independence Favoritism in decisions of government officials Efficiency of legal framework A basic model of economic growth Resources The production function Changes in the capital stock and technology The Latin American labor market The labor force Capital and Latin America New growth theory Key terms and concepts Questions for review and discussion Notes References 4 Limits to growth in Latin America Introduction Growth accounting in Latin America Capital stock growth TFP growth in Latin America Infrastructure The formal sector The informal sector Structural reforms Reducing complexity Taxation Labor market reform Institutional quality Key terms and concepts Questions for review and discussion Notes References Recommended reading 5 Growth and the environment in Latin America Introduction Pollution as a negative externality Pollution and environmental policy Cost–benefit analysis Command and control Market-based initiatives The role of institutions Environmental issues in Latin America Water pollution Air pollution Deforestation Biodiversity The environment and growth Sustainable growth The environmental Kuznets curve Trade, FDI, and the environment Climate change Appendix: demand and supply Key terms and concepts Questions for review and discussion Notes References Recommended reading 6 Latin America and primary commodities Introduction Commodities in Latin America: a brief history The microeconomics of commodities Commodity booms and busts Price volatility The macroeconomics of commodities Commodities and economic development Commodities and Dutch disease Key terms and concepts Questions for review and discussion Notes References Recommended reading 7 Import substitution in Latin America Introduction Structuralism, dependency theory, and ISI Latin American structuralism From structuralism to dependency theory The argument for ISI How ISI worked Trade policy Exchange-rate policy Targeted lending and financial repression SOEs ISI and multinational corporations The results of ISI Industrialization ISI and the informal sector ISI and agriculture Urbanization and pollution Fiscal and monetary policy The trade balance The Lost Decade Key terms and concepts Questions for review and discussion Notes References Recommended reading 8 Latin American trade policy Introduction Comparative advantage Trade based on absolute advantage Trade based on comparative advantage Comparative advantage and ISI Comparative advantage, factor prices, and the distribution of income The Heckscher–Ohlin model Other factors influencing comparative advantage Trade, factor prices, and the distribution of income The economic effects of tariffs and quotas The effects of free trade The effects of tariffs Trade and transportation costs The effects of quotas Latin American trade policy Pre-import-substitution-industrialization trade policy Trade policy under ISI The effective rate of protection Latin America and the General Agreement on Tariffs and Trade/World Trade Organization Regional trade agreements in Latin America Key terms and concepts Questions for review and discussion Notes References Recommended reading 9 Exchange-rate policy Introduction The balance of payments The current account The financial account Flexible exchange rates Fixed exchange rates Intervention in the foreign-exchange market Exchange controls The real exchange rate Managed exchange rates Key terms and concepts Questions for review and discussion Notes References Recommended reading 10 Financing current-account deficits Introduction Debt vs. equity FDI Portfolio capital ODA Remittances Debt The role of the IMF The Brady Plan Key terms and concepts Questions for review and discussion Notes References Recommended reading 11 Macroeconomic policy in Latin America Introduction Fiscal policy in Latin America Financing deficits and the money supply The money supply, prices, and GDP The equation of exchange The inflationary process Economic populism Appendix: basic macroeconomics Key terms and concepts Questions for review and discussion Notes References Recommended reading 12 Macroeconomic stability Introduction Commodity price shocks Oil shocks Debt and exchange-rate shocks The Lost Decade The recovery from the Lost Decade Key terms and concepts Questions for review and discussion Notes References Recommended reading 13 Poverty and inequality Introduction Poverty in Latin America Income inequality Causes of poverty and inequality Historical roots ISI Business and labor-market regulation Educational inequality Reducing poverty and inequality Economic growth Regulation of business and labor Educational reform The role of the state Key terms and concepts Questions for review and discussion Notes References Recommended reading 14 Economic policy debates in Latin America Introduction The end of ISI The Washington Consensus Macroeconomic reform Structural reform Neoliberalism and its critics Growth versus equity Key terms and concepts Questions for review and discussion Notes References Recommended reading Index