Antonio Jorge

Capital markets, growth, and economic policy in Latin America

Introduction and Overview Introduction by Antonio Jorge, Jorge Salazar-Carrillo, and Bernadette West Consequences of the Debt Crisis Consequences of the Debt Crisis in Large Countries: The Case of Argentina by A. Humberto Petrei Economic Growth and Inflation in Colombia by Jose Antonio Ocampo Reflections on the Mexican Crisis by Julio de Quesada The Foreign Debt Crisis and its Consequences on the Venezuelan Economy by Antonio Casas-Gonzalez Growth and Development Perspectives The Mexican Crisis and Caribbean Economic Growth: Impact and Perspectives by Anthony Gonzales A Comparison of East Asian and Latin American Development: Will Latin America Create Its Own Miracle? by F. Gerard Adams The Facts of Economic Development and Virtuous Circles by F. Gerard Adams The Cuban Economy as Seen Through its Foreign Trade by Jorge Salazar-Carrillo Debt and Development in Latin America in the Global Economy by Antonio Jorge and Raul Moncarz Socioeconomic Impact of Tourism in Barbados by Irma T. de Alonso and Jorge Salazar-Carrillo Neoliberalism and Neopopulism: Adjustment and Stability Neoliberalism Versus Neopopulism by John Williamson Some Thoughts on the Achievement of Sustained Growth with Poverty Reduction in Latin America by Gustav Ranis Outline for a Socioeconomic Paradigm for Post-Castro Cuba by Antonio Jorge On the Political Economy of Pensions and Social Security by Peter Diamond Brief Thoughts on the Political Economy of Adjustment: International Markets Versus National Politics by Gerald M. Meier

Ideology, modernization and politico-economic development in Latin America

The authors state that social and political processes are continuously interrelated and modify each other in a circular fashion. The economic variable seems to be the most independent and strategic one in the complex and circular causal process of contemporary history. Its importance is due to the fact that economic forces have become the means that contribute the most to the attainment of varied social and political goals.

The External Debt and the Economic Development of Latin America

This chapter considers the external (which perhaps should be called the eternal) debt crisis of Latin America in four stages. First, we will explore how the debt problem came to be what it now is and the way in which it evolved into its present circumstances. Second, we address the reasons why the developed countries should worry about it. After all, why not allow the Latin Americans to stew in their own handling of the foreign debt? Third, it is necessary to examine what Latin America is doing to handle its debt burden and its implication for the performance of the Latin American economy. And fourth, some possible solutions to the defusing of the remaining debt bombs (those which have not exploded yet) will be examined. It will be shown that, as long as there is no chain reaction in the arsenal, the eternity of the problem should arouse interest, but not deep concern.

Lucrum Cessans, Damnum Emergens and the Market Place

Lucrum Cessans, Damnum Emergens and the Market Place Antonio Jorge and Jorge Salazar-Carrillo* The term foregone profits is, indeed, an ambiguous one. Strictly speaking, it is a conceptual category radically alien to the logic of economics itself. Foregone profits as an economic construct was an analytic device that made its appearance during the XIII century. It was adumbrated by St. Thomas Aquinas and developed by medieval theologians and canonists, among them Duns Scotus, Molina, Mercado and DeLugo. By its very nature, foregone profits was invoked in the moralistic framework of Natural Law by those seeking compensation for the loss of certain (assured) profits. Lucrum cessans (the cessation or disappearance of lucre or profits) was a form of damnum emergens (a situation characterized by the occurrence of economic loss). Lucrum cessans as foregone profits was sometimes claimed by lenders of monetary capital who wished to collect interest on their loans and thus needed to avoid the charge of usury. They had to prove that in lending funds they forewent a real and certain opportunity of profiting by having invested their capital in a given project. Two corollaries follow from that: 1) The lender (businessman or entrepreneur) in question must possess nopoly or quasi-monopoly market powers that will enable him to claim, with certainty, a given amount of foregone profits as a result of a lost economic opportunity and/or 2) The businessman or entrepreneur exercising the claim must operate in the framework of a stationary/traditional society. This has to be the case in order to: a) calculate with certainty the value of lost profits. This would only be possible, assuming the absence of monopoly (itself a very improbable and unlawful market structure), were there to obtain a stationary or steady state economics system. b) postulate the nonexistence of a competitive environment. Obviously, were that not the case, competition would make it impossible to calculate with certainty a given foregone volume of profits. It is essential in order to properly evaluate the lucrum cessans and damnum emergens arguments in their real historical setting, to understand that this line of reasoning is intelligible only in a social universe founded on the philosophicaljuridical notion of Jus Naturale and the concomitant moral concern for Natural and Commutative Justice. Obviously, none of the preceding conditions and realities are even remotely present in modern post-industrial, individualistic, secular and market-driven * Antonio Jorge is professor of Political Economy and Jorge Salazar-Carrillo is professor of Economics and Director of Center for Economic Research, at Florida International University, Tamiami Campus, Miami, Florida.

An Introductory Overview

During the last few years, the countries comprising Latin America and the Caribbean, as a region, have experienced severe economic distress. As a result of the deteriorating economic conditions, which offer bleak prospects for renewed growth in the near future, a reevaluation of the need for foreign investment to augment the forces of economic growth has taken place. This volume addresses the role that foreign investment can play in the reactivation of the economies of this region, through a mixture of papers that explore this issue in general, on a country-by-country basis, and those that are regional in approach.

EXTERNAL DEBT AND DEVELOPMENT IN LATIN AMERICA: A BACKGROUND PAPER

Publisher Summary This chapter presents a panoramic, albeit very general, and preliminary view of the complex interrelationships existing between the changes and composition of the external debt in developing areas, particularly in Latin American nations, and other key operating variables and fundamental economic processes underway in these countries. The descriptive data used throughout this work has been selected from the customary official sources, mainly the latest available reports from international organizations that are standard in this kind of investigation. The chapter reviews the problems and difficulties that must be considered in seeking realistic and satisfactory solutions to the situation of the external debt and its servicing in Latin America. The evolution of the balance of payments in Latin America during the 1970s is marked by the appearance of uncharacteristic negative merchandise trade balances. It has also displayed large fluctuations, a steadily increasing negative service balance, and, as a result, a massive deficit on current account. These tendencies were offset by increasing capital flows to the region which, in turn, led to the rapid expansion of external debt.