Mauro Boianovsky

A View from the Tropics: Celso Furtado and the Theory of Economic Development in the 1950s

The article shows how Celso Furtados interpretation of development and underdevelopment as interdependent phenomena was part of the emergence of development economics as a research field in the 1950s. The main features of underdeveloped economic structures, according to Furtado, were their technological heterogeneity—in the sense of significant differences in the capital-labor ratio between two or more sectors—and underemployment caused by maladjustment between the availability of factors and irreversible production methods. Both characteristics were explained by the historical pattern of integration of those economies into international trade.

Friedrich List and the Economic Fate of Tropical Countries

The goal of this article is twofold. It examines how Friedrich List’s interpretation of the economic dynamics of “tropical” countries (countries located in tropical climates) as nonindustrial exporters of primary commodities fits in his analytical framework and accords with his emphasis on the explanatory value of environmental factors and on the role of colonialism in the development of “temperate” countries (countries located in temperate climates). This is followed by a selective investigation of the reception of List’s ideas in some Latin American countries (particularly Brazil) between the late nineteenth and mid-twentieth centuries, as an attempt to establish whether List’s readers in those countries took any notice of his point that the infant-industry argument did not apply to tropical areas and that such economies should not embark on an industrialization process.

Celso Furtado and the Structuralist-Monetarist Debate on Economic Stabilization in Latin America

This article investigates Celso Furtados role in the broad controversy between structuralists and monetarists about inflation and stabilization that took place in Latin America between the mid-1950s and early 1960s. Furtado was the first to relate Latin American chronic inflation to the new growth pattern of the region after the acceleration of the industrialization process in the 1930s. The Brazilian economist criticized the applicability of the monetary approach to the balance of payments to developing countries and put forward an alternative interpretation of the connection between external disequilibrium and inflation. Furtado formulated and tried to implement in 1962–63 the first structuralist stabilization plan—called the Three-Year Plan—in a Latin American country, based on “gradualism” and regarded as an alternative to stabilization policies sponsored by the IMF in the region.

Johan Åkerman vs. Ragnar Frisch on Quantitative Business Cycle Analysis

Abstract The article provides an account of the debate that took place between the late 1920s and the mid 1930s between the Scandinavian economists Johan Åkerman and Ragnar Frisch about the quantitative treatment of aggregate economic fluctuations. Although both interpreted the business cycle as an interference phenomenon between waves of different order, they disagreed on how to model its generation mechanism. Åkermans emphasis on seasonal changes in his path-breaking application of harmonic analysis to economic fluctuations was rejected by Frisch, who instead suggested the explanation of business cycles as free oscillations determined by impulse and propagation mechanisms.

Haberler, the League of Nations, and the Quest for Consensus in Business Cycle Theory in the 1930s

The paper discusses the League of Nationss project to produce consensus in the interpretation of aggregate economic fluctuations in the 1930s. G. Haberler started working in 1934 at the League of Nations headquarters in Geneva on a broad enquiry that should lead to a synthesis of the several conflicting explanations of the causes of the business cycles, which culminated with the publication of his classic book in 1937. The paper makes use of archival material hitherto unexplored - such as correspondence and verbatim records of conferences - to show how the discussions with economists at the time were incorporated into Haberlers final report, and to interpret in what extent the attempt to reach a consensus was successful.

Patinkin, the cowles commission, and the theory of unemployment and aggregate supply

The paper provides an account of Don Patinkins long-time search for an explanation of the notions of an aggregate demand constraint and unemployment under the assumption of a perfectly competitive goods market. It is argued that Patinkins quest is reflected on the development of the concept of an aggregate supply function in the goods market. Patinkins interpretation of aggregate supply and unemployment is compared to similar ideas put forward by Jacob Marschak, Trygve Haavelmo and Lawrence Klein, his former colleagues at the Cowles Commission in Chicago.

Simonsen and the early history of the cash\in-advance approach

The paper brings to light an early contribution to the cash-in-advance literature made by the Brazilian economist Mario Henrique Simonsen (1935–1997) in an article written in Portuguese as far back as 1964. Simonsen explicitly introduced the cash-in-advance constraint as an inequality in a non-linear programming problem and provided a diagrammatic illustration of the interior and boundary solutions. He also applied the concept to the discussion of the quantity theory of money and showed that the classical dichotomy is valid for the stationary equilibrium of prices over time.

Secular Stagnation: The History of a Macroeconomic Heresy

The paper presents a history of the concept of “secular stagnation”, from Alvin Hansen in the 1930s and 1940s to its recent revival by Larry Summers. We examine Hansens ideas and those of young economists associated with him, notably Evsey Domar, Everett Hagen, Benjamin Higgins, Alan Sweezy, and Paul Samuelson, who were the economists who kept the doctrine alive in the 1950s and to whom Summers and others taking up the idea recently turned. Their ideas are contrasted with the theories of stagnation associated with Josef Steindl and Joseph Schumpeter. It is a label for a historical thesis about the American economy, which, initially seen as distinct from Keynes General Theory, came to be seen as a theoretical proposition based on Keynesian theory. It is argued that the idea of secular stagnation had a political dimension, connected to the New Deal and the Cold War and changing conceptions of economic maturity.

Humboldt and the economists on natural resources, institutions and underdevelopment (1752 to 1859)

Abstract The article discusses how early economists, sometimes informed by the pioneer report on a Latin American country (Mexico) by the geographer A. von Humboldt, interpreted the connections between natural resources, institutions and growth. The paradox of a negative relation between natural wealth and growth was elaborated, before Humboldt,by Hume. Humboldts account of the high degree of income inequality in Mexico caught Malthuss attention, who turned it into a key element of his anti-Ricardo view that the fertility of soil may be associated with poor growth if there is a lack of effective demand. Cairnes claimed that the structural impact of a natural resource boom on the rest of the economy is compatible with the comparative-advantage framework. J.S. Mill articulated the potential perverse effects of natural wealth on effort supply and weak institutions, a theme conspicuous in the modem literature about the “natural resource curse”.

The Neoclassical Growth Model and Twentieth-Century Economics

While growth has been a central element of economic thought at least since the physiocrats and Adam Smith, the modern analysis of growth using formal models began only in the middle of the twentieth century. Thanks largely to Robert Solow’s two articles, “A Contribution to the Theory of Economic Growth” (1956) and “Technical Change and the Aggregate Production Function” (1957), growth economics developed into a major area of research in macroeconomics and economic theory, attracting the attention of a signifi cant part of the economics profession. The current volume collects most of the papers from the twentieth annual HOPE conference, held 25–27 April 2008 at Duke University. The conference addressed the history of modern growth economics, taking Solow’s key papers from the 1950s as its anchor. The conference was not about Solow’s work per se, but addressed the intellectual currents that formed the background to that work and the history of the growth economics that it subsequently informed. The conference considered the rise of growth economics as an active fi eld of research in the 1950s, its extension to several branches of the discipline in the 1960s, its decline in the 1970s, and its return to the center stage of macroeconomics over the last twenty years. In addition to sixteen essays presented at the conference, we are fortunate to be able to include transcripts of two less formal talks. The fi rst is Professor Solow’s keynote lecture to the conference on the future of growth economics. This lecture was delivered as part of a celebration