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A Formal Assessment of New-Developmentalist Theory and Policy


  • Ariel Dvoskin


  • Germán David Feldman



We develop a formal framework that endogeneizes the productive structure of a small open peripheral economy as the outcome of a problem of technical choices. We subsequently examine the main theoretical theses and policy prescriptions of the NewDevelopmentalist approach to economic development. We argue that: a) not only does the pattern of specialization depend on technical conditions, but also on income distribution; b) in an economy without rents, the level of the money-wage nominal-exchange-rate ratio is univocally determined once the rate of profits is known, and shows an inverse relationship with it; c) if differential rents are considered, the level of the rate of profits can be set independently of the money-wage exchange-rate ratio; d) the level of the exchange rate that ensures normal profitability of the primary sector need not coincide with the currentaccount equilibrium rate; e) the effective exchange rate need not gravitate around any of these two former levels, which must be rather seen as minimum thresholds of the effective rate; e) the unpleasant distributive consequences of exchange-rate depreciation can be partially avoided by means of export duties that do not raise primary-commodities production costs

Suggested Citation

  • Ariel Dvoskin & Germán David Feldman, 2017. "A Formal Assessment of New-Developmentalist Theory and Policy," Department of Economics University of Siena 767, Department of Economics, University of Siena.
  • Handle: RePEc:usi:wpaper:767

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    References listed on IDEAS

    1. Roberto FRENKEL, 2004. "Real exchange rate and employment in Argentina, Brazil, Chile and Mexico," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 19(223), pages 29-52.
    2. Blecker, Robert A, 1989. "International Competition, Income Distribution and Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 13(3), pages 395-412, September.
    3. José Luis Oreiro & Fabricio Missio & Frederico G. Jayme Jr., 2015. "Capital Accumulation, Structural Change and Real Exchange Rate in a Keynesian-Structuralist Growth Model," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(2), pages 237-256, June.
    4. repec:mes:postke:v:38:y:2015:i:2:p:218-250 is not listed on IDEAS
    5. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
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    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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