Vol. 11 No. 4 (1991): Oct-Dec / 1991

Vol. 11 No. 4 (1991)

Oct-Dec / 1991
Published October 1, 1991


Mexican stabilization plan: 1982-1989
Elena Landau
Brazilian Journal of Political Economy

The paper analyses economic policy measures related to the 1982-89 Mexican
stabilization plan. It shows that the first phase was predominantly orthodox. In a second step,
a deindexation policy was followed, which kept prices and wages virtually constant during
approximately two years. The results so far have been significant reduction of inflation
rates, the main cost being a loss of foreign exchange reserves and a substantial decrease of
real wages. The Mexican stabilization experiment is usually presented as a successful case
of adjustment to the external sector crisis and inflation reduction. A decisive test of the
program, however, will take place when prices and wages were liberalized.

JEL Classification: E31.

Brazil and the Kondratieff’s and Juglar’s cycle according to the work of Ignácio Rangel
Mauricio Tiommo Tolmasquim
Brazilian Journal of Political Economy

Ignácio Rangel is one of the few Brazilian economists to reflect on the relationship between business cycles and the history of Brazilian economics. In this article, we utilize this subject as a connecting “thread” of part of his work.

JEL Classification: P16; O40.

The regulation of the wheat milling industry in Brazil
Vera Martins da Silva
Brazilian Journal of Political Economy

This article discusses the impact of the regulation of the Brazilian wheat market on the industrial structure of the wheat flour and the possibility of the subsidy absortion by the in-dustry. First, it is remarked the institutional aspects of the wheat flour industry. Then, the framework used was based on indicators developed in Industrial Organization theory, that indicates that the regulation is not the cause of the increase in market concentration nor that the industry absorved the subsidy. On the contrary, it seems that the industry real profit decreased during the relevant period of subsidy policy (1970-80).

JEL Classification: Q18; L66.

The (neo)classic postulates of employment and the determination of wages in Keynes
Luiz Miranda
Brazilian Journal of Political Economy

This article deals with Keynes’ contribution on the recovering of the income and employment levels of growth. Contrary to the (neo) classical approach, Keynes argues that unemployment and the fall of nominal wages are not necessary to economic recovering. Even with fixed nominal wages and increasing primary costs, economic growth on the short run, via effective demand expansion allows firms to maximize their profits through the reduction of the real wage caused by the increase of general price level. On Keynes’ view, the incompatibility between the sus-taining of real wage level and the short run economic recovering arises from his critical refor-mulation of the principle of decreasing returns, as stated by the (neo) classical theory of produc-tion costs and supply prices. However, still in a Keynesian perspective, this incompatibility, if taken for granted it is not a theoretical request for the analysis of economic growth on the long run.

JEL Classification: B22; B31.

The indetermination of Senior
Antonio Maria da Silveira
Brazilian Journal of Political Economy

The commitments and working requirements of abstract, applied, and art of economics are assessed within an analogy with the fields of inert matter and life. Abstract economics is the pure logic of the phenomenon. Applied positive economics presupposes many distinct abstract sciences. Art presupposes applied economics and direct knowledge of the specifici-ties which characterize the time-space individuality of the phenomenon. This is an indetermi-nation clearly formulated by Senior and Mill; its connection with institutionalism is discus-sed. The Ricardian Vice is the habit of ignoring the Indetermination; its prevalence in mains-tream economics is exemplified, and its causes analyzed.

JEL Classification: B41.

Hyperinflation and stabilization in Brazil: the first Collor Plan
Luiz Carlos Bresser-Pereira, Yoshiaki Nakano
Brazilian Journal of Political Economy

In this paper are analyzed (1) the conditions that gave rise to hyperinflation in
early 1990, (2) the alternative programs of stabilization that were being suggested, and (3)
the stabilization plan that was finally adopted, the Collor Plan, whose failure the authors,
writing in June 1990, predict already in the title of the paper: “the first Collor Plan”. This
plan examined according to (1) the logic behind freezing 70% of the financial assets; (2) the
fiscal adjustment aspect; (3) the monetary or liquidity question; (4) the demand problem;
and finally (5) the causes of the resurgence of inflation with recession. For this analysis,
the authors utilize a neo-structuralist approach to the inertial or autonomous inflation
prevailing in Brazil.

JEL Classification: E31.


Chronic dollarization: a note
João Marcus Marinho Nunes, Marcos Cintra Cavalcanti de Albuquerque
Brazilian Journal of Political Economy

This is a response to Bresser-Pereira and Aldo Ferrer, on the matter of the
dollarization of Argentina and the possible dollarization of the Brazilian economy. A series
of econometric tests shows that Brazil never had the imminence of a dollarization process.

JEL Classification: E31.

Keynes and the problem of issuing money as a debt to the monetary authorities
Leonardo Fernando Cruz Basso
Brazilian Journal of Political Economy

This note aims to illustrate Keynes’s view on how the money supply does not
generates a burden to the State.

JEL Classification: E12; E51.

Notes and Comments

Human resource development: trends in resource allocation in Latin America, Asia and Europe
Peter T. Knight, Sulaiman S. Wasty
Brazilian Journal of Political Economy

This paper builds on the necessity of the State to provide quality public
education to boost productivity, growth and, ultimately, welfare to the population.

JEL Classification: I24; I25; I28.


Building a civilized economic policy
Eduardo Matarazzo Suplicy
Brazilian Journal of Political Economy

This piece is the transcription of the inaugural master lecture at the Faculty of
Economics and Administration of the University of São Paulo, on 7 March 1991.

JEL Classification: A22.

Brazilian Journal of Political Economy

In March 1991, Argentina’s new Finance Minister, Domingo Cavallo, adopted
a plan for the legal convertibility of the Austral into dollars. The Cavallo Plan became
popularly known as a ‘dollarization’ plan, when, in fact, it was about the Australianization
of the Argentine economy. We have published the following articles in Documents
section of the journal due to the importance of the analysis and information they contain.

JEL Classification: E31; F34.