Gilberto Tadeu Lima

Structural change, balance-of-payments constraint, and economic growth: evidence from the multisectoral Thirlwall`s law

This paper contributes to the literature on balance-of-paymentsconstrained growth by investigating how structural change, identified with changes in the sectoral composition of exports and imports, affects the external constraint. We test both the original and a multisectoral version of Thirlwalls law for a sample of Latin American and Asian countries. The original Thirlwalls law is found to hold for all sample countries except South Korea, whereas the multisectoral analogue holds for all of them. As the sectoral composition of exports and imports is found to matter for growth, we analyze the evolution of each countrys weighted trade income elasticities.

Pricing Behaviour and the Cost-Push Channel of Monetary Policy

This paper examines the empirical and theoretical status of the cost-push channel of monetary policy, according to which interest rates affect the costs of production and hence pricing behaviour. Particular attention is paid to modelling the cost-push channel in a manner consistent with cost-plus pricing theory, which is identified as the canonical model of pricing behaviour in heterodox economics. It is shown that different variants of cost-plus pricing behaviour give rise to qualitatively different specifications of the cost-push channel, with important consequences for macrodynamics and the conduct of monetary policy.

Inflation targeting and macroeconomic stability in a Post Keynesian economy

This paper examines the compatibility of inflation targeting with an economy that is Post Keynesian in character. We show that in a Post Keynesian environment, policymakers can both set and achieve an inflation target without adverse consequences for the real economy, as long as an appropriate policy mix is chosen. The latitude that policymakers have in making this choice is investigated. One of our key results is that orthodox policy regimes do not provide appropriate policy mixes. Indeed, the more orthodox the policy regime becomes, the less viable is inflation targeting in a Post Keynesian economy.

Estrutura produtiva, restrição externa e crescimento econômico: a experiência brasileira

Productive structure, external constraint and economic growth: the Brazilian experience - We analyze the sharp drop in the growth rate that has been experienced by the Brazilian economy since the 1980s, using the balance-of-payments-constrained growth approach. Empirical results show that growth in the 1930-2004 period was balance-of-payments-constrained, with terms of trade and capital flows playing quite a minor role in the reaching of external equilibrium. The sharp drop in growth that has experienced since the 1980s, however, can be explained by a tighter external constraint, given the behavior of the terms of trade and capital flows. In the 1990s, on the other hand, a new development strategy made for a structural break in the income elasticity of imports, thus leading to a lower growth rate compatible with balance-of-payments equilibrium.

Balance‐of‐payments‐constrained growth in a multisectoral framework: A panel data investigation

This paper contributes to the literature on balance-of-payments-constrained growth by providing an innovative empirical evaluation of a disaggregated version of the so-called Thirlwalls Law derived from a Pasinettian multisectoral framework. After estimating sectoral elasticities of exports and imports for a considerable panel dataset of 90 countries over the period 1965-1999, we have performed two empirical exercises. First, we grouped countries together by income level and evaluated a multisectoral balance-of-payments-constrained growth model by analyzing prediction errors and mean absolute deviations. Second, we carried out a regression validity test on the results. Our main findings give support to the validity of the multisectoral version of Thirlwalls Law, providing therefore further understanding of the structural determinants of the uneven international development and guidance for the design of growth-enhancing national structural policies.

Macrodinâmica do produto sob restrição externa: a experiência brasileira no período 1930-2004

The paper analyses the behavior of output and income in Brazil in the 1930-2004 period, thus intending to contribute to a better understanding of the constraints that have been faced by the Brazilian economy to achieve high levels of these variables in the long run. The empirical study developed in this paper revealed that long-run levels of output and income in Brazil have been mostly determined by conditions associated with the external equilibrium of the economy.

Inflation Targeting and Macroeconomic Stability with Heterogeneous Inflation Expectations

Abstract: Drawing on an extensive empirical literature that suggests persistent and time-varying heterogeneity in inflation expectations, this paper embeds two inflation forecasting heuristics–one based on the current rate of inflation, and the second anchored to the official inflation target–in a simple macrodynamic model. Decision makers switch between these forecasting heuristics based on satisficing evolutionary dynamics. We show that convergence toward an equilibrium consistent with the level of output and rate of inflation targeted by policymakers is achieved regardless of whether or not the satisficing evolutionary dynamics that guide the choices agents make between inflation forecasting strategies are subject to noise. We also show that full credulity–a situation where all agents eventually use the forecasting heuristic based on the target rate of inflation–is neither a necessary condition for realization of the inflation target nor an inevitable consequence of the economy’s achievement of this target. These results demonstrate that uncertainty in decision making resulting in norm-based inflation expectations that are both heterogeneous and time-varying need not thwart the successful conduct of macroeconomic policy.

Exchange Rate, Income Distribution and Technical Change in a Balance-of-Payments Constrained Growth Model

ABSTRACT This article develops a formal model that accounts for the net effect of an exchange rate devaluation on the long-term balance-of-payments constrained growth rate. Such a model investigates how a currency devaluation impacts on the home country non-price competitiveness via changes in income distribution and the rate of technological innovation. The model is built upon two plausible hypotheses. First, it is assumed that the rate of technological innovation is directly related to the income elasticity of demand for exports and inversely related to the income elasticity of demand for imports. Second, it is assumed that a redistribution of income between labor and capital has an ambiguous direct impact on the income elasticities ratio. The model shows that the net impact of a currency devaluation on growth can go either way depending on the institutional framework of the economy.

A Neo-Kaleckian Model of Profit Sharing, Capacity Utilization and Economic Growth

This paper sets forth a Neo�?Kaleckian model of capacity utilization and growth with distribution featuring a profit�?sharing arrangement. While a given proportion of firms compensate workers with only a base wage, the remaining proportion do so with a base wage and a share of profits. Consistent with the empirical evidence, workers hired by profit�?sharing firms have a higher productivity than their counterparts in base�?wage firms. While a higher profit�?sharing coefficient raises capacity utilization and growth irrespective of the distribution of compensation strategies across firms, a higher frequency of profit�?sharing firms does likewise only if the profit�?sharing coefficient is sufficiently high.

Causalidade entre crédito bancário e nível de atividade econômica na região metropolitana de São Paulo: algumas evidências empíricas

This study contributes to the understanding of the causality between banking credit and economic activity in the Metropolitan Region of Sao Paulo (MRSP). Questions have been raised as to the prevailing Granger-causality for national economies, and a local approach that has not yet been followed in the empirical literature is pursued here. It is dealt with the relationship between several banking credit modalities and an indicator of economic activity in the MRSP from January 1992 to December 2003, with a bivariate Autoregressive Vector model having found a birectional causality.