Vol. 10 No. 2 (1990): Apr-Jun / 1990

Vol. 10 No. 2 (1990)

Apr-Jun / 1990
Published April 1, 1990


Growth and distribution: a stylized model of the Wealth of Nations
Edward Amadeo, Carlos Parcias Jr.
Brazilian Journal of Political Economy

In this paper, a simplified model is developed to analyze the main characteristics
of the accumulation process based on Adam Smith’s view. The model is constructed on the
basis of a single product and emphasizes the relation between productivity, determined by
the division of labor, the proportion of the economic surplus invested in productive labor,
the natural wage and the profit rate, during the phase of progress and in the stationary
state of the economies. Additionally, a process is suggested for determining the natural wage
based on the elements stressed by the classical economists.

JEL Classification: B12; O41.

Challenges of Brazilian Development
Paulo Renato Souza
Brazilian Journal of Political Economy

This article analyses the international economy speedy process of transformation,
since the seventies, leading to a new pattern of growth and a new technological trajectory;
seeks to show how, unlike is divulged, the State had a conclusive participation straightening
out some of the emergent economies, as Korea, Taiwan and the Japan itself; concluding that,
it remains, to Brazil, confronting this new framework, to invest systematically in technology
and to reach patterns of international productivity and competitivity.

JEL Classification: O19; O10; F63.

The monetary policy during the Cruzado Plan
Pedro Bodin de Moraes
Brazilian Journal of Political Economy

This article analyses monetary policy during the Cruzado Plan. It is argued that
the establishment of the overnight interest rate at very low level (around 15%/year) was one
of the main factors behind the quick appearance of excess of demand in almost all markets.
This excessively slacken monetary policy was the result of the government’s decision of
transforming indexated public bonds into bonds with a fixed value, assuming that future inflation
would be zero. The monetary policy of the Cruzado Plan is compared to the policies
adopted in Argentina in the first months of the Austral plan, and in Israel from July 1985
on. This comparison reveals that in both cases the process of remonetization of the economy
was done much more gradually than in Brazil, and that in both countries there was not excess
demand in the initial phase of the price freeze.

JEL Classification: E31; E52

Authoritarianism and economic orthodoxy: Chile 1974-87
Jaime Gatica, Alejandra Mizala
Brazilian Journal of Political Economy

The purpose of this article is to assess the Chilean economic model implemented
during the military regime between 1974-1987. It is argued that the orthodox policies
put into effect during these years led to slow growth and to worsen the living conditions of
the majority of the population. The main reforms and stabilization policies is firstly presented.
Secondly, using officials’ indicators we assess the results of these measures comparing
with the Chilean economic performance of the sixties and with the other countries of the
Latin America. Finally, in the conclusion, we briefly present the main issues involved in a
future economic strategy.

JEL Classification: N16; N46.

Public finance in the “Estado Novo”, 1937-45
Mauricio C. Coutinho, Tamás Szmrecsányi
Brazilian Journal of Political Economy

State intervention in the economy and governmental public policies are usually
regarded in peripherical economies as one of the main factors in the development process.
According to most historians, the period of the Estado Novo had a great importance in the
recent evolution of the Brazilian economy, representing a turning point from the primary-export
system to the present one, based on the industrial sector and the internal market. The
article intends to test these hypotheses in quantitative and qualitative terms, by comparing
the evolution of Brazilian public finance between 1938 and 1945 with the previous and the
ulterior eight-year periods (from 1930 to 1937, and from 1946 to 1953).

JEL Classification: N46; N16; H16.

From Baker to Brady: Can the new plan work?
Robert Devlin
Brazilian Journal of Political Economy

The Brady Plan proposes to stimulate reforms and development in countries
facing problems with their external debt through debt relief and debt servicing. However,
debt reduction is nothing new, as this was already an important component of the Brady
Plan and its “market menu” strategy. The greatest contribution of this Plan is the willingness
to support the voluntary reduction of the external debt with public resources and public
institutional reform. As the Plan is conceptually correct, the difficulty is still in the lack of
funds and public coordination. Without a greater commitment of public resources and a
stronger institutional basis for rewards and fines that can induce banks to “voluntary” losses,
the Brady Plan will only produce a modest reduction in excess external debt. Furthermore,
a partial reduction in excess debt produces mixed benefits for both debtors and creditors.

JEL Classification: F34; F38.


Political economy in Brazil today
Mario Possas
Brazilian Journal of Political Economy

This paper is divided in two completely different parts. The first one presents
a briefly commented survey on-the main contributions to the theoretical debate in Political
Economy in Brazil during the 80’s, comprising three major currents: the marxist/neomarxist,
the neoricardian and the postkeynesian. The second part tries to identify some of the most
important issues that are facing political economists (not only in Brazil) in the present crisis
in economic theory which concern, in the author’s view, the theoretical problems of time in
economics: logical vs. historical time; short vs. long run; equilibrium vs. dynamic analysis.

JEL Classification: B22; B24

Notes and Comments

South Korea and Taiwan: Notes on industrial policy
Hamilton de Moura Ferreira Jr., Otaviano Canuto dos Santos Fo.
Brazilian Journal of Political Economy

This piece is concerned about the industrial policies enacted by South Korea
and Taiwan after WWII. We order our presentation into three main topics: i) strong state
interventionism; ii) differences between the two, Taiwan with strong presence of state-led
productive sector and fragmented private capital, while in South Korea there is higher presence
of heavy and high-tech industries and private conglomerates; iii) the advances and
obstacles in this decade.

JEL Classification: O25; O14; F52.

Banks, industries and the State in Brazil
Wendy J. Barker
Brazilian Journal of Political Economy

Credit is a driven force in all modern economies and, as such, to understand
how banks operates in allocating savings is pivotal. Equally important is the relationship between
banks and industries, as there is a correlation between advances in these two sectors.
This study aims to understand such interaction, in both institutional and commercial levels.

JEL Classification: G21; O16


Solving the debt crisis: Debt relief and adjustment
Luiz Carlos Bresser-Pereira
Brazilian Journal of Political Economy

On January 5, 1989, Professor Luiz Carlos Bresser-Pereira, full professor at Fundação
Getúlio Vargas and editor of this Journal, presented the following testimony before
the Committee on Banking, Finance and Urban Affairs of the U.S. House of Representatives.

JEL Classification: F34; H63.