Albert Fishlow

Lessons from the past: capital markets during the 19th century and the interwar period

On Friday, 13 August 1982, Finance Minster Jesus Silva Herzog of Mexico made a series of visits to the International Monetary Fund, the Federal Reserve, and the U.S. Treasury. His message to each was the same: Mexico could no longer continue to service its debt. Thus began a dramatic weekend of negotiations that marked the end of the preceding decades buoyant expansion of developing country debt and the start of a still continuing response to the sudden collapse.

ORIGINS AND CONSEQUENCES OF IMPORT SUBSTITUTION IN BRAZIL

Publisher Summary This chapter discusses the origins and consequences of import substitution in Brazil. When the price of the product increases more than other prices—the characteristic of a potential import substitute during a real devaluation—a much larger profit margin is created. The exogenous shock of the war permitted the earlier excess capacity to be utilized, and carried the industrialization process a step further to the point of substantial replacement of previous imports that hitherto had continued to compete. The lack of association between the rate of growth of output and the degree to which industrialization was import substitutive is equally impressive. Import substitution in terms of the reduction of the import coefficient is a descriptive rather than analytic concept. Layered development may limit the economy not only by causing profitable social investments to be bypassed because interdependences are ignored but also by impeding the development of an indigenous technology.

Indexing Brazilian Style: Inflation without Tears?

IN EARLY 1974 the business and popular press let scarcely a week go by without some reference to the possibility of indexing bonds, savings accounts, and even contracts, to the price level. In this way, some argue, the corrosive symptoms of inflation can at least be neutralized, even if the malady itself cannot be cured. The basic principle is not new. The search for an immutable standard traces back at least to Jevons;l and Irving Fisher apparently succeeded in persuading an American firm to issue an indexed bond in 1925. More recently, in the 1950s, Finland, France, and Israel, among other countries, have resorted to such practices for governmental obligations and savings accounts; and Latin American countries have experimented with deposit accounts denominated in dollars, as well as with adjustable exchange rates.2 Renewed interest in indexing is a clear consequence of the persistence of inflation in the developed countries in recent years. Monetary and fiscal policy has been of little avail; and the apparent failure of price and wage controls, joined to the cost implications of shortfalls of energy and food

Levels of Nineteenth-Century American Investment in Education

From the earliest time, the United States and her predecessor colonies stood close to or at the very forefront of the world in the educational attainment of the mass of the populace. The first available literacy statistics of 1840 testify to that past impressive accomplishment: overall, more than 90 per cent of white adults achieved this degree of minimum competence, and even in the laggard South the record was not significantly poorer. At that date only Scotland and Germany are comparable, with England and France much farther behind. What therefore seems to be the case is that popular education successfully preceded an extensive system of publicly supported and controlled schools.

Tax evasion, inflation and stabilization

Abstract This paper focuses on the public resort to tax evasion in developing countries as an adjustment tactic during economic downturn. We show, using a theoretical model of intertemporal consumption, that tax compliance declines when current income declines, expectations about future income improve, or inflation rises. We then apply the model empirically to the cases of Argentina, Brazil and Chile, three countries which have long experience with tax evasion and inflation over the last 40 years, and find confirmation.

Quantitative Economic History: An Interim Evaluation Past Trends and Present Tendencies

Few recent intellectual currents have been so self-consciously controversial as the New Economic History. It has been a rare meeting patronized by historians or economists that has not featured a discussion of the merits and defects of applying theoretical and quantitative constructs to historical problems. This occasion is obviously no exception. Yet milestones must be respected, and on this thirtieth anniversary, a review of the profitability, if not the viability, of the new techniques being applied to economic history seems very much in order.

Latin American Failure against the Backdrop of Asian Success

This article examines the principal reasons for the poor Latin American economic performance in contrast to Asian success in the last decade. These include an adverse international economy that discriminated against large debtors, a set of domestic distortions introduced by excess external debt, and a political incapacity to implement coherent and consistent adjustment policies.

Economic development in the 1990s

Abstract This article reviews the World Bank World Development Report (WDR) of 1991, which sets forth a new “market-friendly” strategy to be followed by developing countries. It focuses on three broad subject areas where further discussion and debate seem required: internal policy, external strategy and the role of government. In the first, the lack of Bank attention to reduced investment, a consequence in part of the debt crisis, is emphasized. In the second, three points are made: the importance of imports as a factor driving growth; the role of industrial policy; and the need to pay more attention to the larger role of direct foreign investment in the future. In the final section on the role of the state, some questions are raised regarding the new consensus of minimal governmental intervention. But, overall, the WDR does offer signs of progress and hope of strong leadership in tackling the ever greater problems of development and inequality in the 1990s.

Deficits, debt and destabilization: The perversity of high interest rates

Abstract In this paper we explore the dimensions of the dynamic instability inherent in the combination of a large public debt and the persistence of high real interest rates, a situation characteristic of many Latin American countries at the present time. We show how it may be impossible simultaneously to attain growth and inflation objectives following orthodox stabilization strategies. Dynamic instability constrains increasingly the feasible policy space with continuing high real interest rates.

The East European debt crisis in the Latin American mirror

In these brief remarks addressed to the Latin American response to changing international conditions in the 1970s and 1980s, I shall focus on three issues: the relationship between the choice of debt as a policy instrument and state “structure,†at least as loosely denned; the special problems posed by the debt option that most Latin American countries pursue; and the characteristics of enforced domestic adjustment to the absence of capital inflows beginning in 1982.