Franklin Serrano

Technical Change, Effective Demand and Employment

Ricardo and Marx saw technological change as a possible cause of long-period unemployment. Neoclassical and Schumpeterian economists regard technological unem ployment as a transitory phenomenon. This paper argues that the capital critique (i) demolishes the neoclassical claim that market mechanisms will restore full employment whenever workers are displaced by technical change, and (ii) rehabilitates the old Ricardian argument that automatic compensation factors are generally absent. The neo-Schumpeterian notion of autonomous investment is also rejected, in favour of the view that, in the long period, all investment is induced. By extending Keyness theory of effective demand to the long period through a model based on the supermultiplier, this paper suggests that the ultimate engines of growth are located in the autonomous components of effective demand--exports, government spending and autonomous con sumption. Technical change plays a role in the accumulation process through its effects on consumption patterns and the material input requirements. However, the impact of technical change is now seen to depend upon circumstances such as income distribution, the availability of bank liquidity and exchange rate policy.

Growth Rate and Level Effects, the Stability of the Adjustment of Capacity to Demand and the Sraffian Supermultiplier

Abstract The paper presents a simple but complete formal version of the Sraffian supermultiplier model in which (i) growth is led by the autonomous components of demand that do not create capacity; (ii) private productive investment is an induced expenditure; and (iii) income distribution is exogenous. We show that the main results of the long-period and fully adjusted versions of the model in terms of growth rate and level effects are quite similar and therefore that such results in no way require the full adjustment of capacity to demand. We then analyze a simple set of sufficient dynamic local stability conditions that allow the long-period positions to gravitate towards the fully adjusted position in which capacity is adjusted to demand and that also provide the upper limit to demand-led growth paths. Finally, we show how some critics of the model have misinterpreted it as being supply-led and how this has led to a further confusion between the analysis of the tendency towards a constant value of the capacity-saving-determined warranted rate of growth and the proper stability analysis of the opposite process of adjusting capacity to demand (which tends to adjust the warranted rate endogenously to the growth rate of autonomous demand).

Macro/Micro interactions: Economic and institutional uncertainties and structural change in Brazilian industry

This article analyses the ways in which the recent structural evolution of the Brazilian industrial sector has been profoundly influenced by rapid sequential changes in the microeconomic and macroeconomic policy environment. As Brazil moved towards greater openness and macroeconomic stability in the second half of the 1990s, strategies pursued within the industrial sector underwent radical change as enterprises sought to realize badly needed improvements in international competitiveness. This article argues that this process can be best understood in terms of a dynamic, two-way interaction between microeconomic and macroeconomic forces. In particular, it is suggested that ongoing structural change within Brazilian industry may be exerting a significant influence on the nature of current and prospective macroeconomic conditions.

O conflito distributivo e a teoria da inflação inercial

This paper briefly discusses a few aspects of the evolution of the theory of inertial inflation in the Brazilian literature. Some of its main shortcomings are analyzed from a Sraffian perspective, that sees cost push inflation as being based on conflicting claims over the distribution of income.

Aggregate demand and the slowdown of Brazilian economic growth in 2011-2014

This paper looks in detail at the sharp slowdown in the Brazilian economy for the years 2011-2014. We argue that the slowdown is overwhelmingly the result of a sharp decline in domestic demand, rather than a fall in exports and even less any change in external financial conditions. The sharp fall in domestic demand, in turn, is shown to be a result of deliberate policy decisions made by the government and was not necessary, i.e., it was not made in response to some external constraint such as a balance-of-payments problem.

Distribution and Cost-Push inflation in Brazil under inflation targeting, 1999-2014

In this paper, we analyze Brazilian inflation under the inflation-targeting system from a conflict inflation perspective and show how the inflation target system only worked well when there was a trend of exchange rate appreciation. Later, the strengthening of the bargaining power of workers and rising real wages since 2006, combined with continuous nominal exchange rate depreciation after mid-2011, increased distributive conflicts and are ultimately behind the recent shift toward austerity.

SERÁ QUE “ACABOU O DINHEIRO”? FINANCIAMENTO DO GASTO PÚBLICO E TAXAS DE JUROS NUM PAÍS DE MOEDA SOBERANA

Este trabalho discute como se financiam os gastos publicos e se determinam as taxas de juros sobre os titulos de divida publica de curto e longo prazo num pais de moeda soberana. A analise segue a abordagem da taxa de juros exogena, que sintetiza os resultados comuns da visao da moeda endogena da Modern Monetary Theory e das financas funcionais de Lerner. Focado particularmente no caso brasileiro, o trabalho comeca com a analise dos procedimentos operacionais do financiamento do gasto publico e a relacao entre o Tesouro e o Banco Central, discute a relacao entre financiamento do governo e as taxas de juros de titulos publicos de curto e longo prazo. Como um pais (e nao apenas o setor publico) pode sim quebrar em moeda estrangeira, a secao seguinte analisa a questao do spread de “risco soberano” e sua relacao com os passivos externos em moeda estrangeira do pais (e nao do setor publico) e discute brevemente tambem a relacao entre esse spread e as notas concedidas pelas agencias de rating . Oartigo conclui discutindo de forma sucinta algumas implicacoes da analise anterior para a discussao recente no Brasil (a partir de 2015) sobre a necessidade e formas do “ajuste fiscal”.